Helpful for Shipping Industry
The Korea Shipowners' Association announced on January 24 that the Double Taxation Avoidance Agreement between South Korea and India was amended so that South Korean shipping companies’ shipping income generated as a result of their maritime transport services provided for Indian shipping companies and shippers can be tax-free.
According to the previous agreement that became effective in 1986, a tax cut of 10% was applied to such income. The new agreement was signed in October 2015 and the South Korean National Assembly and the Indian Parliament ratified it in September and October last year, respectively.
Until December 2016, South Korea has signed double taxation avoidance agreements with 91 countries such as the United States, China, Japan and European countries. Partial or full tax exemption for international transportation income is currently effective according to some of the agreements signed with the Philippines, India, Thailand, etc.
“The implementation of the new agreement in India and South Korea is expected to result in a tax cut of 20 billion won or so a year on the part of South Korean shipping companies doing business in the Indian market,” the association explained, adding, “Then, the South Korean companies will be able to get more opportunities in the fast-growing market.”