Article 207-8 (Special Procedure for Withholding Tax for Application of Treaty Reduced Rate to Non-Residents)

A beneficial owner of domestic source income who intends to apply the reduced rate pursuant to Article 156-6 (1) of the Act shall submit an application for treaty reduced rate for domestic source income (hereinafter referred to as the "application for reduced rate" in this Article), as prescribed by the Ordinance of the Ministry of Economy and Finance, to the withholding agent before receiving payment of such domestic source income. Provided, that in the case of domestic source income received through an account opened with the Korea Securities Depository by a foreign securities depository institution, as referred to in Article 296 (5) of the Capital Markets and Financial Investment Business Act, with the Korea Securities Depository pursuant to Article 294 of the same Act, the application for reduced rate may not be submitted. <Amended by 2025.12.30>

When applying paragraph ①, if the domestic source income is paid through a foreign investment vehicle, the foreign investment vehicle shall receive the application for reduced rate from the beneficial owner and submit a foreign investment vehicle report (hereinafter referred to as the "foreign investment vehicle report" in this Article), as prescribed by the Ordinance of the Ministry of Economy and Finance, attached with the beneficial owner's details, to the withholding agent before receiving payment of the domestic source income. Provided, that this shall not apply to a foreign investment vehicle that meets all of the following requirements (hereinafter referred to as a "publicly offered foreign collective investment vehicle" in this Article) and submits documents that can confirm the matters specified in each subparagraph, along with details of the number of beneficial owners by country and the total investment amount of the foreign investment vehicle, attached to the foreign investment vehicle report. <Amended by 2025.12.30> 1. A foreign investment vehicle similar to a collective investment vehicle under the Capital Markets and Financial Investment Business Act, which is registered or approved under the laws of the other contracting state. 2. The number of investors shall be 100 or more as of the end of the immediately preceding accounting period (in the case of a newly established foreign investment vehicle, this refers to the date of submission of the foreign investment vehicle report), without issuing securities on a private placement basis (in the case where investors are other foreign investment vehicles, such foreign investment vehicles shall be regarded as one investor). 3. It shall not be a foreign investment vehicle for which the tax treaty prescribes the exclusion of treaty benefits.

When applying paragraphs ① and ③, if any of the following applies, it shall be deemed to be a beneficial owner. 1. Pensions established in a foreign country under the laws of the other contracting state, which are equivalent to the National Pension Act, the Public Official Pension Act, the Military Pension Act, the Private School Teachers' Pension Act, and the Employee Retirement Benefit Guarantee Act. 2. Funds established in a foreign country under the laws of the other contracting state, which are non-profit organizations and do not distribute profits to their members. 3. Deleted <2019.2.12>

The "grounds prescribed by Presidential Decree" in Article 156-6 (3) of the Act refer to any of the following grounds. In this case, subparagraphs 2 or 3 shall be limited to the part where the grounds occurred, and for publicly offered foreign collective investment vehicles, subparagraph 3 shall be excluded. <Amended by 2014.2.21> 1. Failure to receive an application for reduced rate or a foreign investment vehicle report. 2. Failure to respond to a request for supplementation of the contents stated in the submitted application for reduced rate or foreign investment vehicle report. 3. Inability to identify the beneficial owner through the submitted application for reduced rate or foreign investment vehicle report.