The provisions of the double tax treaty between Georgia and South Korea apply from January 1 2017.
Georgia's Minister of Finance Nodar Khaduri and Yoo Il Ho, the deputy prime minister and minister of strategy and finance of South Korea signed the DTA on March 31 2016. Following appropriate actions, the treaty was enacted and entered into force on November 17 2016 and it generally applies from the beginning of 2017.
The DTA intends to facilitate economic cooperation and the inflow of investments, along with the avoidance of double taxation, which will be achieved through the introduction of international standards for the exchange of information for tax purposes.
The agreement is based on the model tax convention developed by the OECD and defines the principles of taxation between the countries. In terms of withholding tax rates, it stipulates a 5% (assuming at least 10% participation) or 10% withholding tax rate on dividends (in all other cases), as well as 10% withholding tax rate on interest and royalties.
South Korea is one of the significant economic partners of Georgia. In line with the data released by the National Statistics Office of Georgia (GeoStat), the inflow of foreign direct investments (FDI) from the South Korea into Georgia is increasing. In 2015-16 (Q1 and Q2 of 2016), FDIs into Georgia reached $61.5 million.
The treaty concluded with South Korea is the latest in a list of 53 DTA signed between Georgia and other countries.
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