- Enhanced Measures to Prevent Tax Avoidance and Improve Taxpayer's Convenience -

1. The Protocol Amending the Korea-Kyrgyzstan Double Taxation Avoidance Agreement ("Protocol") enters into force on July 5, 2025, as both countries have completed their domestic procedures* required for the Protocol’s effectuation after signing it on December 3, 2024.

  * The Korean side, having obtained the National Assembly's consent (on March 13, 2025), notified its completion of domestic procedures on March 25, 2025, while the Kyrgyz side did so on June 5, 2025.

2. The purpose of the double taxation avoidance agreement (“tax treaty") is to eliminate double taxation which may arise on investment and transactions between two countries, and to prevent tax avoidance. Having signed the tax treaty with Kyrgyzstan in 2012 and implemented it since then, Korea has sought to amend the treaty since 2018.

3. The Protocol reflects the two countries’ active participation in international cooperation to prevent base erosion and profit shifting (BEPS) as well as offshore tax evasion, in line with initiatives led by the OECD and the G20. It aims to ensure that treaty benefits are not granted to transactions conducted primarily for tax avoidance purposes, while improving the convenience of taxpayers in filing tax appeal cases.

4. The gist of this Protocol is as follows:

a. First, to strengthen the prevention of tax avoidance, treaty benefits, such as non-taxation or reduced taxation at the source country, will not apply to transactions conducted mainly to obtain such benefits.

b. Second, the Protocol enhances the Contracting State's obligations to cooperate in exchanging information. The Contracting State that receives a request for information must utilize its information-gathering measures to obtain the requested information, even if such information is not needed for its own tax purposes.

c. Third, taxpayers can now apply for a Mutual Agreement Procedure not only in their country of residence but also either Contracting State over tax actions inconsistent with the tax treaty.

5. Following the elevation of Korea-Kyrgyzstan relations to a comprehensive partnership last year, practical cooperation between the two countries has continued to deepen. With the entry into force of this Protocol, the two countries will be better equipped to effectively address tax avoidance and offshore tax evasion, while enhancing taxpayers' convenience and promoting economic exchanges and investment.

6. The Korean government will continue to actively seek tax treaties or their amendments with other countries to help create a favorable environment for Korean companies’ expansion overseas, and to further invigorate economic exchanges and investment with foreign countries.