Tax on foreign-currency debt holdings to produce windfall

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Tax on foreign-currency debt holdings to produce windfall

Korea expects $210 million in yearly receipts from a tax on holdings of foreign-currency debt introduced by the government to restrain short-term external borrowing.

Australia & New Zealand Banking Group paid $760,000, the first fee under the so-called “macro-prudential stability levy,” to the central bank on Feb. 28, the Bank of Korea and Ministry of Strategy and Finance said in a joint e-mailed statement yesterday.

Korea adopted the tax last August on non-deposit foreign-currency liabilities held by both domestic and foreign banks, and will use the funds to help ease a liquidity crunch at financial companies in crisis. Debt of less than one year is subject to a levy of 0.2 percent and those with longer maturities are subject to lower rates. Bloomberg

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