Relevant Acts

Details of Exemption

Farmland Act, Management of Mountainous Districts Act

A facility installed for a PPP project may be tax exempted fully-or by 50%-from the farmland conservation charge and the substitute forest development cost.

Restriction of Special Taxation Act

A concessionaire is permitted to issue social overhead capital bonds for implementing a PPP project, and a separate rate of 14% applies to the interest income from the bonds. Effective until 31 December 2018.

A zero tax rate is applied to the value-added tax on an infrastructure facility or for construction services, which the concessionaire supplies to the central or local government. Effective until 31 December 2018.

A zero tax is applied to the value-added tax on urban railroad construction services supplied directly by the concessionaire. Effective until 31 December 2018.

A foreign investment of at least $10 million in a PPP facility in a foreign investment zone is exempt from corporate, income, acquisition, registration, and property taxes.

Corporate Tax Act

An allowance for writing off indemnity receivables is recognized as a loss on the Infrastructure Credit Guarantee Fund under the Public-Private Partnerships in Infrastructure Act.

Where a domestic corporation spends a subsidy or other asset received for implementing a PPP project to acquire or ameliorate an asset for the project, the equivalent amount may be included in losses in calculating the income for the applicable fiscal year.

Land developed for implementing a PPP project is exempt from the additional income tax for transferring the property.

Where a concessionaire meets the requirements for a nominal investment company under the Corporate Tax Act and distributes 90% or more of distributable income as dividends, the amount of these dividends may be deducted in calculating the amount of income. The requirements for a nominal investment company are at least W5 billion ($5 million) for companies implementing any PPP project other than a BTL, or equity of at least W1 billion ($1 million) for companies implementing a BTL PPP.

Local Tax Act

A corporation newly established in the Seoul Metropolitan Area for implementing a PPP project is recognized as an exception to the triple taxation of the registration tax.

Acquistion and registration tax is waived for a project implemented under the condition that the property will revert or be donated to the central or local government.