The National Tax Service announced on Dec. 27 that it has resolved 125 cases of double taxation through mutual agreement procedures with tax authorities in 16 countries from January to November this year to alleviate unfair double taxation for domestic and foreign taxpayers and create a favorable environment for businesses.
Out of the 125 cases of double taxation resolved this year, a total of 85 cases were settled through advance pricing agreements (APAs), preventing prior taxation on the basis of pre-agreed prices through pre-agreement between the tax authorities. This marks a record high since the approval of the first APA in 1997, showing a 32.8% increase compared to the same period last year.
With the APAs approved this year, domestic and foreign companies have been exempted from the risk of transfer pricing audits for an average of 6 years and 3 months.
The number of cases resolving double taxation by country was highest with China at 24, followed by Japan with 24 and the United States with 22. Additionally, there were also successful resolutions for South Korean company investments, including two cases in Malaysia, one in Vietnam, nine in Indonesia, and two in India, indicating a consistent rise in domestic business investments in these nations.
In line with the diversification of corporate overseas investments, the tax authorities organized mutual agreement meetings for the first time in January for Mexico, September for Peru, and December for Kuwait. This initiative was taken to establish a framework for the swift resolution of double taxation issues for entering companies.