Korean regulator proposes tax exemption for funds

A new mutual fund market rescue proposal offers tax exemption on corporate income tax.

The South Korean parliament will in the coming weeks debate a series of measures aimed at staunching an accelerating outflow of money from mutual funds, according to officials of the Financial Supervisory Commission FSC.

The proposal, to be tabled by the FSC to the parliament when it re-opens, includes giving mutual funds exemptions on corporate income tax, says Setong Kim, assistant manager at the FSC in charge of mutual fund rules.

As Korean mutual funds are operating under a company structure, a cut in corporate income tax will ultimately benefit fund investors. Tax on individual's dividend income, however, will remain under the proposal. The commission hopes the tax boon will activate the local...

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