A few South Korean companies in the Kaesong Industrial Complex have paid tax to the North Korean authorities, the first such payments since the complex opened in 2004.
According to Ministry of Unification information released today, one South Korean company paid $7,000 in income tax for the 2010 fiscal year. It was one of a total of four companies that paid a total of $153,000. Three are in the machinery sector, while the other is in the chemicals industry.
Under the ‘Kaesong Industrial Complex Tax Regulations’, companies engaged in manufacturing in the complex pay 14% income tax. However, they are exempt from tax for five years after turning a profit, and for another three years receive a 50% tax break.
The company that paid $7000 had made a tax-free profit for the five years to 2009, and paid the required 50% of its total income tax bill the year after.