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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
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Korea: Dividends

The Korean tax deducted from dividends, in the case of a portfolio investor, at a rate of 15 per cent under the agreement, qualifies for credit as a direct tax (see INTM164010(c)).

Under the agreement, tax is deducted at 5 per cent where the recipient of the dividend is a United Kingdom resident company controlling, directly or indirectly, at least 25 per cent of the voting power in the Korean company paying the dividend.

The above rates do not apply where the dividends are effectively connected (see INTM153110 fifth sub-paragraph) with a business carried on by the United Kingdom resident recipient through a permanent establishment in Korea.

Where the recipient of the dividend is a United Kingdom company controlling, directly or indirectly, at least 10 per cent of the voting power in the Korean company paying the dividend, credit is also due for the underlying tax (see INTM164010(d)) under Article 23(2)(b).