NationalSymbols of the Republic of Korea
International Taxation
Offshore Gift Tax
Gift Tax on Property Located Outside Korea

Under the current Inheritance and Gift Tax Law (IGTL), a gift tax is imposed only if;

1) The donee is domiciled in Korea or

2) The donated property is located in Korea. Accordingly, if a Korean individual donates a property located offshore to a donee domiciled offshore, a Korean gift tax cannot be levied. In this case, if the foreign country in which the donee is domiciled does not impose a gift tax, then double non-taxation will occur. Korea, which is now a member of the OECD, intends to adopt the "taxation of donor" principle of the OECD Model Double Taxation Convention on Estates and Inheritances and on Gifts.

Under the LCITA and its enforcement decree, if a person domiciled in Korea donates offshore property to a person who is domiciled in a foreign country where a donee is not subject to a gift tax, the donor will be subject to the Korean gift tax.