Korea, Jordan Sign Double Taxation Prevention Agreement
Jordan-South Korea, Economics, 11/20/2002

Korea and Jordan signed an agreement to prevent double taxation. The accord made up of 29 clauses was reached in talks held in Amman, Jordan over the weekend, and is expected to strengthen economic cooperation between the two countries.

In the agreement, Korea and Jordan concurred on such issues as detailing what economic activities could be taxed by the host country as well as outlining tax rates for financial transactions, royalty earnings and profits generated on the stock market.

The talks also outlined non-discrimination of nationals from the other country and the need for mutual agreement in handling conflicts involving tax issues. Going into details, Korea and Jordan will only levy taxes on branch offices and static work plants which conduct business and generates profits within their respective territories. The country where business operations are taking place can also collect taxes on real estate sales and construction operations that exceed 12 months in duration.

On the other hand, building projects by contractors based in the other country not exceeding a year will not be taxed by the country where the construction is taking place, while profits made on the securities and bonds market will be exempt from local taxation.

Earnings made by airlines and shipping companies having branch offices but making their money on international routes will also be free from local tax obligations as a result of the agreement. In addition, Korean and Jordanian businesses earning profits through interest, stock dividends and royalties will be entitled to a low tax rate of 10 percent. The National Tax Service (NTS), moreover, will consider taxes paid in Jordan as being legitimate deductibles, while its Jordanian counterpart will take like actions for its companies that have paid taxes in Korea.

Bilateral economic trade has steadily grown over the past few years with Korea exporting US$184.8 million to Jordan last year, while importing $11.0 million worth of goods.

Previous Stories:
  Egypt, Jordan sign ten economic, trade agreements   (10/29/2002)
  Egypt -Jordan talks on economic trade and investment   (10/26/2002)
  Jordan and the World bank   (10/16/2002)

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