Seoul Administrative Court erases Lone Star fund tax billA local court yesterday ruled in favor of U.S. private equity fund Lone Star and asked tax authorities to cancel the 170 billion won ($156.9 million) tax it slapped on the fund.
Accepting Lone Star’s request to cancel the tax, the Seoul Administrative Court said domestic corporate tax cannot be imposed given that Lone Star does not own a fixed site of operation in Korea.
The judge who presided over the ruling said all important investment decisions were made by U.S. head office.
Yeoksam District Tax Office appealed the ruling.
The tax office imposed the 170 billion won corporate tax instead of a combined 460 billion won in income and corporate tax on Lone Star’s capital gains for reselling Korea Exchange Bank and Kukdong Engineering and Construction following a ruling by the Supreme Court in January 2012 that Lone Star is subject to a corporate tax, not an income tax.