GIC wins Korean tax appeal

GIC wins Korean tax appeal

 

THE Government of Singapore Investment Corporation, which manages US$100 billion of reserves, has won an appeal against a South Korean tax charge of 16.7 billion won (S$22.2 million). The Seoul High Court ruled on June 17 that the Gangnam-gu district office should scrap taxes imposed on the agency’s purchase of an office tower, Bloomberg reported yesterday.

 

Bloomberg also said that in April 2006, the Seoul government charged the tax because GIC used two companies to buy Star Tower in 2004, breaching local regulations. GIC split the purchase of the 45-floor Star Tower building between two paper companies to avoid acquisition taxes, the Seoul Metropolitan Government said in a statement then. Acquisition taxes are imposed if more than 51 per cent of the property is bought by a single company.

 

GIC bought the building in December 2004 from US buyout firm Lone Star Funds for an undisclosed amount. A report then put the sale at about 900 billion won. Lone Star reportedly paid 633.2 billion won for the building in June 2001.

 

A spokesman for GIC Real Estate told BT yesterday: ‘We welcome the Seoul High Court’s decision. It is an affirmation that we have been conducting our business in full compliance with all relevant Korean laws and regulations.’

 

Source: Business Times

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