Emerging Markets Rates and Currencies Handbook

Supporting documents (including declaration/approval from the proper authority for a capital transaction e.g. loan, guarantee or investment) should be submitted to the FX bank prior to trading. Citibank Korea Inc. 50, Saemunan-ro, Jongno-gu Seoul, South Korea FX Sales Contact: +82 2 2077 4142 / fx.icg.korea@citi.com Tax Summary – South K orea Korea W/H Tax • 20% WHT • Under certain tax treaties typically 10%, with further reduction possible on country by country basis • In addition to the above indicated tax rates, a resident surtax is charged at a rate of 10% of the respective tax rate • 20% WHT • In addition to the above indicated 20%, a resident surtax is charged at a rate of 10% of the respective tax rate • In case of the borrowings from the listed local financial intuitions, the interest is not subject to WHT • N/A • 20% WHT • Under certain tax treaties typically 5-15%, with further reduction possible on country by country basis • 10% surtax applied incrementally to above rates (i.e. 10%multiplied by WHT rate) Deductibility of interests • Cap on interest deduction to 30% of company’s EBITDA • If borrowings from a foreign controlling shareholder exceeds 2x the ownership equity of the foreign controlling shareholder (6x for FI), the paid interest and discount fee on the relevant excessive portion will be disallowed and further treated as a dividend payment • If borrowing from a third party under a payment guarantee by the foreign controlling shareholder exceeds 2x the ownership equity of the foreign controlling shareholder (6x for financial institution), the paid interest and discount fee on the relevant excessive portion will be disallowed and further treated as a dividend payment • Generally deductible as long as the related loan is used for business purposes, however, there are multiple exceptions • N/A • N/A Deductibility of FX losses • Generally tax deductible Other • Nominal stamp duty is calculated based on the loan notional • N/A • N/A Country Tax Deductibility and Considerations Inter-Co Debt Offshore Derivatives Equities Bank Loans Offshore Local Borrowing