Allan Cinnamon provides an update on tax treaty developments
The Korean Supreme Court recently considered whether
patent royalties were sourced in 
Korea (Daebub 2012 du 18356 2014.11.27). In the US court a Korean company settled a patent infringement suit brought by a US company by making it a payment in the form of royalties. The patents in question were mostly registered in the US and outside Korea. Under art 14.1 of the Korea/US treaty the Korean company deducted a 15% withholding tax from the payment asserting that it was a payment of royalties sourced within Korea. The Korean Corporation Tax Law art 93(9) provides inter alia that patent royalties are considered sourced within Korea irrespective of where registered if the...
