[Consultation] Regarding overseas subsidiaries, determination of withholding tax obligations

Company A paid software usage fees to foreign IT company B and received the right to use the software, which it then sold to companies in Korea. At this time, company B had generated sales in Korea, so when company A paid software usage fees to company B, the payer was required to withhold and pay corporate tax and value-added tax.

During this process, company A argued with other domestic companies regarding who was the withholding tax agent for the software usage fees, and eventually sought out Law firm Veat for an accurate interpretation of the tax law. Law firm Veat reviewed the provisions of the Corporate Tax Law and Value-Added Tax Law and the contract terms between company A and other domestic companies, found a precedent that precisely matched the case, and provided a basis for determining the withholding tax agent, which resolved the dispute between company A and the domestic companies using the software.

Thank you.

Law firm Veat