International Tax Institute Management Office-400 ( August 23, 201)

A corporation

Where a domestic corporation enters into a derivatives contract with a foreign corporation operating a non-financial business without a permanent establishment in the Republic of Korea and pays settlement fees to a foreign corporation, the foreign corporation's received fees shall constitute other income in the Republic of Korea.

Where a domestic corporation enters into a derivatives contract with a foreign corporation operating a non-financial business that has no permanent establishment in the Republic of Korea, it shall constitute underlying assets of domestic listed stocks owned by such foreign corporation, and where it is required to pay a foreign corporation an adjustment fee in addition to the decline on the contract date according to the base price at a specified point of time in the contract terms and conditions, the consideration received by the foreign corporation shall be other income in the Republic of Korea under subparagraph 10 of Article 93 of the Corporate Tax Act.

Article 93 of the Corporate Tax Act

1. A summary of the contents of inquiry;

The income classification of the amount of derivatives loss that a domestic corporation (B) pays to a foreign corporation to the foreign corporation (A) at the time of settlement due to a decline in the domestic funeral (A) price by the difference settlement type contract.