South Korean firms in joint venture pay US$160,000 in tax to N. Korea
July 12, 2012, 10:59 am TWN
SEOUL -- South Korean firms at a joint industrial estate in North Korea have paid about US$160,000 in tax to the North as their businesses thrive despite political tensions, an official said Wednesday.
The Kaesong Industrial Complex in the namesake city just north of the tightly guarded border opened in 2004 as a symbol of cross-border reconciliation. It has continued to attract workers despite high political and military tensions in recent years, and is a source of legitimate hard currency for the cash-strapped and sanctions-hit North.
Some 50,000 North Koreans — mostly women — work for about 120 South Korean makers of clothes, machinery, utensils and other items.
Under rules to encourage investment, factories are exempt from corporate income tax for the first five years after they begin making profits. They are given a 50-percent reduction on the 14-percent rate for the following three years.