AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF
CHINA AND THE GOVERNMENT OF THE REPUBLIC OF KOREA FOR THE
AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL
EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the People’s Republic of China and the Government of the Republic of Korea;
Desiring to conclude an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income;Have agreed as follows:

Article 1 Personal Scope
This Agreement shall apply to persons who are residents of one or both of the Contracting States.

Article 2 Taxes Covered
1. This Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its local authorities, irrespective of the manner in which they are levied.
2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation.
3. The existing taxes to which the Agreement shall apply are:
(a) In the People’s Republic of China:
(i) the individual income tax;
(ii) the income tax for enterprises with foreign investment and foreign enterprises; and
(iii) the local income tax;
(hereinafter referred to as “Chinese tax” ) ;
(b) In the Republic of Korea:
(i) the income tax;
(ii) the corporation tax; and
(iii) the inhabitant tax;
(hereinafter referred to as “Korean tax” ) .
4. This Agreement shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws within a reasonable period of time after such changes.

Article 3 General Definitions
1. For the purposes of this Agreement, unless the context otherwise requires:
(a) the term “China” means the People’s Republic of China; when used in geographical sense, means all the territory of
the People’s Republic of China, including its territorial sea,
in which the Chinese laws relating to taxation apply, and any
area beyond its territorial sea, within which the People’s
Republic of China has sovereign rights of exploration for and
exploitation of resources of the seabed and its sub-soil and
superjacent water resources in accordance with international
law;
(b) the term “Korea” means the Republic of Korea; when used
in geographical sense, means all the territory of the Republic
of Korea, including its territorial sea, in which the Korean
laws relating to taxation apply, and any area beyond its
territorial sea, within which the Republic of Korea has
sovereign rights of exploration for and exploitation of
resources of the seabed and its sub-soil and superjacent water
resources in accordance with international law;
(c) the terms “a Contracting State” and “the other
Contracting State” mean China or Korea as the context
requires;
(d) the term “tax” means Chinese tax or Korean tax, as the
context requires;
(e) the term “person” includes an individual, a company and
any other body of persons;
(f) the term “company” means any body corporate or any
entity which is treated as a body corporate for tax purposes;
(g) the terms “enterprise of a Contracting State” and
“enterprise of the other Contracting State” mean,
respectively, an enterprise carried on by a resident of a
Contracting State and an enterprise carried on by a resident
of the other Contracting State;
(h) the term “nationals” means:
(i) all individuals possessing the nationality of a
Contracting State;
(ii) all legal persons, partnerships and associations
deriving their status as such from the laws in force in a
Contracting State;
(i) the term “international traffic” means any transport by
a ship or aircraft operated by an enterprise which has its
place of head office or effective management in a Contracting
State, except when the ship or aircraft is operated solely
between places in the other Contracting State;
(j) the term “competent authority” means:
(i) in the case of China, the State Tax Bureau or its
authorized representative;
(ii) in the case of Korea, the Minister of Finance or his
authorized representative.
2. As regards the application of this Agreement by a
Contracting State, any term not defined therein shall, unless
the context otherwise requires, have the meaning which it has
under the laws of that Contracting State concerning the taxes
to which this Agreement applies.
Article 4
Resident
1. For the purposes of this Agreement, the term “resident of
a Contracting State” means any person who, under the laws of
that Contracting State, is liable to tax therein by reason of
his domicile, residence, place of head office, place of
effective management, or any other criterion of a similar
nature.
2. Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, then his
status shall be determined as follows:
(a) he shall be deemed to be a resident of the Contracting
State in which he has a permanent home available to him; if he
has a permaneat home available to him in both States, he shall
be deemed to be a resident of the Contracting State with which
his personal and economic relations are closer (centre of
vital interests) ;
(b) if the State in which he has his centre of vital
interests cannot be determined, or if he has not a permanent
home available to him in either Contracting State, he shall be
deemed to be a resident of the State in which he has a
habitual abode;
(c) if he has a habitual abode in both Contracting States or
in neither of them, he shall be deemed to be a resident of the
Contracting State of which he is a national;
(d) if he is a national of both Contracting States or of
neither of them, the competent authorities of the Contracting
States shall settle the question by mutual agreement.
3. Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both Contracting
States, the competent authorities of the Contracting States
shall by mutual agreement endeavour to settle the question and
to determine the mode of application of this Agreement to such
person.
Article 5
Permanent Establishment
1. For the purposes of this Agreement, the term “permanent
establishment” means a fixed place of business through which
the business of an enterprise is wholly or partly carried on.
2. The term “permanent establishment” includes especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop; and
(f) a mine, an oil or gas well, a quarry or any other place
of extraction of natural resources.
3. The term “permanent establishment” likewise encompasses:
(a) a building site, a construction, assembly or
installation project or supervisory activities in connection
therewith, but only where such site, project or activities
continue for a period of more than 6 months;
(b) the furnishing of services, including consultancy
services, by an enterprise of a Contracting State through
employees or other engaged personnel in the other Contracting
State, provided that such activities continue for the same
project or a connected project for a period or periods
aggregating more than 6 months within any 12-month period.
4. Notwithstanding the provisions of paragraphs 1 to 3, the
term “permanent establishment” shall be deemed not to include:

(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to the
enterprise;
(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of storage,
display or delivery;
(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise;
(d) the maintenance of a fixed place of business solely for
the purpose of purchasing goods or merchandise or of
collecting information, for the enterprise;
(e) the maintenance of a fixed place of business solely for
the purpose of carrying on, for the enterprise, any other
activity of a preparatory or auxiliary character;
(f) the maintenance of a fixed place of business solely for
any combination of activities mentioned in sub-paragraphs (a)
to (e), provided that the overall activity of the fixed place
of business resulting from this combination is of a
preparatory or auxiliary character.
5. Notwithstanding the provisions of paragraphs 1 and 2,
where a person—other than an agent of an independent status to
whom the provisions of paragraph 6 apply—is acting in a
Contracting State on behalf of an enterprise of the other
Contracting State, has and habitually exercises an authority
to conclude contracts in the name of the enterprise, that
enterprise shall be deemed to have a permanent establishment
in the first-mentioned Contracting State in respect of any
activities which that person undertakes for the enterprise,
unless the activities of such person are limited to those
mentioned in paragraph 4 which, if exercised through a fixed
place of business, would not make this fixed place of business
a permanent establishment under the provisions of that
paragraph.
6. An enterprise of a Contracting State shall not be deemed
to have a permanent establishment in the other Contracting
State merely because it carries on business in that other
Contracting State through a broker, general commission agent
or any other agent of an independent status, provided that
such persons are acting in the ordinary course of their
business. However, when the activities of such an agent are
devoted wholly or almost wholly on behalf of that enterprise,
he will not be considered an agent of an independent status
within the meaning of this paragraph.
7. The fact that a company which is a resident of a
Contracting State controls or is controlled by a company which
is a resident of the other Contracting State, or which carries
on business in that other State (whether through a permanent
establishment or otherwise), shall not of itself constitute
either company a permanent establishment of the other.
Article 6
Income from Immovable Property
1. Income derived by a resident of a Contracting State from
immovable property (including income from agriculture or
forestry) situated in the other Contracting State may be taxed
in that other State.
2. The term “immovable property” shall have the meaning
which it has under the law of the Contracting State in which
the property in question is situated. The term shall in any
case include property accessory to immovable property,
livestock and equipment used in agriculture and forestry,
rights to which the provisions of general law respecting
landed property apply, usufruct of immovable property and
rights to variable or fixed payments as consideration for the
working of, or the right to work, mineral deposits, sources
and other natural resources. Ships and aircraft shall not be
regarded as immovable property.
3. The provisions of paragraph 1 shall apply to income
derived from the direct use, letting or use in any other form
of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to
the income from immovable property of an enterprise and to
income from immovable property used for the performance of
independent personal services.
Article 7
Business Profits
1. The profits of an enterprise of a Contracting State shall
be taxable only in that Contracting State unless the
enterprise carries on business in the other Contracting State
through a permanent establishment situated therein. If the
enterprise carries on business as aforesaid, the profits of
the enterprise may be taxed in the other Contracting State but
only so much of them as is attributable to that permanent
establishment.
2. Subject to the provisions of paragraph 3, where an
enterprise of a Contracting State carries on business in the
other Contracting State through a permanent establishment
situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which
it might be expected to make if it were a distinct and
separate enterprise engaged in the same or similar activities
under the same or similar conditions and dealing wholly
independently with the enterprise of which it is a permanent
establishment.
3. In determining the profits of a permanent establishment,
there shall be allowed as deductions expenses which are
incurred for the purposes of the business of the permanent
establishment, including executive and general administrative
expenses so incurred, whether in the State in which the
permanent establishment is situated or elsewhere.
4. lnsofar as it has been customary in a Contracting State
to determine the profits to be attributed to a permanent
establishment on the basis of an apportionment of the total
profits of the enterprise to its various parts, nothing in
paragraph 2 shall preclude that Contracting State from
determining the profits to be taxed by such an apportionment
as may be customary. The method of apportionment adopted
shall, however, be such that the result shall be in accordance
with the principles contained in this Article.
5. No profits shall be attributed to a permanent
establishment by reason of the mere purchase by that permanent
establishment of goods or merchandise for the enterprise.
6. For the purposes of the preceding paragraphs, the profits
to be attributed to the permanent establishment shall be
determined by the same method year by year unless there is
good and sufficient reason to the contrary.
7. Where profits include items of income which are dealt
with separately in other Articles of this Agreement, then the
provisions of those Articles shall not be affected by the
provisions of this Article.
Article 8
Shipping and Air Transport
1. Profits from the operation of ships or aircraft in
international traffic shall be taxable only in the Contracting
State in which the place of head office or effective
management of the enterprise is situated.
2. If the place of head office or effective management of a
shipping enterprise is aboard a ship, then it shall be deemed
to be situated in the Contracting State in which the home
harbour of the ship is situated, or, if there is no such home
harbour, in the Contracting State of which the operator of the
ship is a resident.
3. The provisions of paragraph 1 shall also apply to profits
from the participation in a pool, a joint business or an
international operating agency.
Article 9
Associated Enterprises
Where
(a) an enterprise of a Contracting State participates
directly or indirectly in the management, control or capital
of an enterprise of the other Contracting State, or
(b) the same persons participate directly or indirectly in
the management, control or capital of an enterprise of a
Contracting State and an enterprise of the other Contracting
State,
and in either case conditions are made or imposed between
the two enterprises in their commercial or financial relations
which differ from those which would be made between
independent enterprises, then any profits which would, but for
those conditions, have accrued to one of the enterprises, but,
by reason of those conditions, have not so accrued, may be
included in the profits of that enterprise and taxed
accordingly.
Article 10
Dividends
1. Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting State
may be taxed in that other Contracting State.
2. However, such dividends may also be taxed in the
Contracting State of which the company paying the dividends is
a resident, and according to the laws of that State, but if
the recipient is the beneficial owner of the dividends the tax
so charged shall not exceed:
(a) 5 per cent of the gross amount of the dividends if the
beneficial owner is a company (other than a partnership) which
holds directly at least 25 per cent of the capital of the
company paying the dividends;
(b) 10 per cent of the gross amount of the dividends in all
other cases.
This paragraph shall not affect the taxation of the company
in respect of the profits out of which the dividends are paid.

3. The term “dividends” as used in this Article means income
from shares, or other rights, not being debt-claims,
participating in profits, as well as income from other
corporate rights which is subjected to the same taxation
treatment as income from shares by the laws of the State of
which the company making the distribution is a resident.
4. The provisions of paragraphs 1 and 2 shall not apply if
the beneficial owner of the dividends, being a resident of a
Contracting State, carries on business in the other
Contracting State of which the company paying the dividends is
a resident, through a permanent establishment situated
therein, or performs in that other Contracting State
independent personal services from a fixed base situated
therein, and the holding in respect of which the dividends are
paid is effectively connected with such permanent
establishment or fixed base. In such case, the provisions of
Article 7 or Article 14, as the case may be, shall apply.
5. Where a company which is a resident of a Contracting
State derives profits or income from the other Contracting
State, that other Contracting State may not impose any tax on
the dividends paid by the company, except insofar as such
dividends are paid to a resident of that other Contracting
State or insofar as the holding in respect of which the
dividends are paid is effectively connected with a permanent
establishment or a fixed base situated in that other
Contracting State, nor subject the company’s undistributed
profits to a tax on the company’s undistributed profits, even
if the dividends paid or the undistributed profits consist
wholly or partly of profits or income arising in such other
Contracting State.

Article 11
Interest
1. Interest arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that
other Contracting State.
2. However, such interest may also be taxed in the
Contracting State in which it arises and according to the laws
of that Contracting State, but if the recipient is the
beneficial owner of the interest the tax so charged shall not
exceed 10 per cent of the gross amount of the interest.
3. Notwithstanding the provisions of paragraph 2, interests
arising in a Contracting State and derived by the Government
of the other Contracting State including local authorities
thereof, the central bank of the other Contracting State or
any financial institution performing functions of a
governmental nature or by any resident of the other
Contracting State with respect to debt-claims guaranteed or
indirectly financed by the Government of that other
Contracting State including local authorities thereof, the
central bank of that other Contracting State or any financial
institution performing functions of a governmental nature
shall be exempt from tax in the first-mentioned Contracting
State.
4. The term “interest” as used in this Article means income
from debt-claims of every kind, whether or not secured by
mortgage and whether or not carrying a right to participate in
the debtor’s profits, and in particular, income from
government securities and income from bonds or debentures,
including premiums and prizes attaching to such securities,
bonds or debentures.
5. The provisions of paragraphs 1, 2 and 3 shall not apply
if the beneficial owner of the interest, being a resident of a
Contracting State, carries on business in the other
Contracting State in which the interest arises, through a
permanent establishment situated therein, or performs in that
other Contracting State independent personal services from a
fixed base situated therein, and the debt-claims in respect of
which the interest is paid is effectively connected with such
permanent establishment or fixed base. In such case the
provisions of Article 7 or Article 14, as the case may be,
shall apply.
6. Interest shall be deemed to arise in a Contracting State
when the payer is the Government of that Contracting State, a
local authority or a resident of that Contracting State.
Where, however, the person paying the interest, whether he is
a resident of a Contracting State or not, has in a Contracting
State a permanent establishment or a fixed base in connection
with which the indebtedness on which the interest is paid was
incurred, and such interest is borne by such permanent
establishment or fixed base, then such interest shall be
deemed to arise in the Contracting State in which the
permanent establishment or fixed base is situated.
7. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and
some other person, the amount of the interest, having regard
to the debt-claims for which it is paid, exceeds the amount
which would have been agreed upon by the payer and the
beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the
payments shall remain taxable according to the laws of each
Contracting State, due regard being had to the other
provisions of this Agreement.

Article 12
Royalties
1. Royalties arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that
other Contracting State.
2. However, such royalties may also be taxed in the
Contracting State in which they arise, and according to the
laws of that Contracting State, but if the recipient is the
beneficial owner of the royalties, the tax so charged shall
not exceed 10 per cent of the gross amount of the royalties.
3. The term “royalties” as used in this Article means
payments of any kind received as a consideration for the use
of, or the right to use, any copyright of literary, artistic
or scientific work including cinematograph films and films or
tapes for radio or television broadcasting, any patent,
know-how, trade mark, design or model, plan, secret formula or
process, or for the use of, or the right to use, industrial,
commercial or scientific equipment, or for information
concerning industrial, commercial or scientific experience.
4. The provisions of paragraphs 1 and 2 shall not apply if
the beneficial owner of the royalties, being a resident of a
Contracting State, carries on business in the other
Contracting State in which the royalties arise, through a
permanent establishment situated therein, or performs in that
other Contracting State independent personal services from a
fixed base situated therein, and the right or property in
respect of which the royalties are paid is effectively
connected with such permanent establishment or fixed base. In
such case, the provisions of Article 7 or Article 14, as the
case may be, shall apply.
5. Royalties shall be deemed to arise in a Contracting State
when the payer is the Government of that Contracting State, a
local authority or a resident of that Contracting State.
Where, however, the person paying the royalties, whether he is
a resident of a Contracting State or not, has in a Contracting
State a permanent establishment or a fixed base in connection
with which the liability to pay the royalties was incurred,
and such royalties are borne by such permanent establishment
or fixed base, then such royalties shall be deemed to arise in
the Contracting State in which the permanent establishment or
fixed base is situated.
6. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and
some other person, the amount of the royalties, having regard
to the use, right or information for which they are paid,
exceeds the amount which would have been agreed upon by the
payer and the beneficial owner in the absence of such
relationship, the provisions of this Article shall apply only
to the lastmentioned amount. In such case, the excess part of
the payments shall remain taxable according to the laws of
each Contracting State, due regard being had to the other
provisions of this Agreement.
Article 13
Capital Gains
1. Gains derived by a resident of a Contracting State from
the alienation of immovable property referred to in Article 6
and situated in the other Contracting State may be taxed in
that other Contracting State.
2. Gains from the alienation of movable property forming
part of the business property of a permanent establishment
which an enterprise of a Contracting State has in the other
Contracting State or of movable property pertaining to a fixed
base available to a resident of a Contracting State in the
other Contracting State for the purpose of performing
independent personal services, including such gains from the
alienation of such a permanent establishment (alone or
together with the whole enterprise) or of such a fixed base,
may be taxed in that other Contracting State.
3. Gains from the alienation of ships or aircraft operated
in international traffic or movable property pertaining to the
operation of such ships or aircraft shall be taxable only in
the Contracting State in which the place of head office or
effective management of the enterprise is situated.
4. Gains from the alienation of shares of the capital stock
of a company the property of which consists directly or
indirectly principally of immovable property situated in a
Contracting State may be taxed in that Contracting State.
5. Gains from the alienation of any property other than that
referred to in paragraphs 1 to 4 shall be taxable only in the
Contracting State of which the alienator is a resident.
Article 14
Independent Personal Services
1. Income derived by a resident of a Contracting State in
respect of professional services or other activities of an
independent character shall be taxable only in that
Contracting State except in one of the following
circumstances, when such income may also be taxed in the other
Contracting State:
(a) if he has a fixed base regularly available to him in the
other Contracting State for the purpose of performing his
activities; in that case, only so much of the income as is
attributable to that fixed base may be taxed in that other
Contracting State;
(b) if his stay in the other Contracting State is for a
period or periods exceeding in the aggregate 183 days in the
calendar year concerned; in that case, only so much of the
income as is derived from his activities performed in that
other Contracting State may be taxed in that other Contracting
State.
2. The term “professional services” includes especially
independent scientific, literary, artistic, educational or
teaching activities as well as the independent activities of
physicians, lawyers, engineers, architects, dentists and
accountants.
Article 15
Dependent Personal Services
1. Subject to the provisions of Articles 16, 18, 19, 20 and
21, salaries, wages and other similar remuneration derived by
a resident of a Contracting State in respect of an employment
shall be taxable only in that Contracting State unless the
employment is exercised in the other Contracting State. If the
employment is so exercised, such remuneration as is derived
therefrom may be taxed in that other Contracting State.
2. Notwithstanding the provisions of paragraph 1,
remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting
State shall be taxable only in the first-mentioned State if:
(a) the recipient is present in the other Contracting State
for a period or periods not exceeding in the aggregate 183
days in any twelve-month period concerned; and
(b) the remuneration is paid by, or on behalf of, an
employer who is not a resident of the other Contracting State;
and
(c) the remuneration is not borne by a permanent
establishment or a fixed base which the employer has in the
other Contracting State.
3. Notwithstanding the provisions of paragraphs 1 and 2 of
this Article, remuneration derived in respect of an employment
exercised aboard a ship or aircraft operated by an enterprise
of a Contracting State in international traffic, shall be
taxable only in the Contracting State in which the place of
head office or effective management of the enterprise is
situated.
Article 16
Directors’ Fees
Directors’ fees and other similar payments derived by a
resident of a Contracting State in his capacity as a member of
the board of directors of a company which is a resident of the
other Contracting State may be taxed in that other Contracting
State.
Article 17
Artistes and Athletes
1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other Contracting State.
2. Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised.
3. Notwithstanding the provisions of paragraphs 1 and 2 of this Article, income derived by entertainers or athletes who are residents of a Contracting State from the activities exercised in the other Contracting State under a plan of cultural exchange between the Governments of both Contracting States shall be exempt from tax in that other Contracting State.

Article 18 Pensions
1. Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that Contracting State.
2. Notwithstanding the provisions of paragraph 1, pensions paid and other similar payments made by the Government of a Contracting State or a local authority thereof under a public welfare scheme of the social security system of that
Contracting State shall be taxable only in that Contracting
State.
Article 19
Government Service
1.
(a) Remuneration, other than pension, paid by the Government
of a Contracting State, a local authority or organization
thereof to an individual in respect of services rendered to
the Government of that Contracting State, a local authority or
organization thereof, in the discharge of the functions of a
governmental nature, shall be taxable only in that Contracting
State.
(b) However, such remuneration shall be taxable only in the
other Contracting State if the services are rendered in that
other Contracting State and the individual is a resident of
that other Contracting State who:
(i) is a national of that other Contracting State; or
(ii) did not become a resident of that other Contracting
State solely for the purpose of rendering the services.
2.
(a) Any pension paid by, or out of funds created by, the
Government of a Contracting State, a local authority or
organization thereof to an individual in respect of services
rendered to the Government of that Contracting State, a local
authority or organization thereof, in the discharge of the
functions of a governmental nature, shall be taxable only in
that Contracting State.
(b) However, such pension shall be taxable only in the other
Contracting State if the individual is a resident of, and a
national of, that other Contracting State.
3. The provisions of Articles 15, 16, 17 and 18 shall apply
to remuneration and pensions in respect of services rendered
in connection with a business carried on by the Government of
a Contracting State or a local authority thereof.
Article 20
Students and Trainees
A student, business apprentice or trainee who is or was
immediately before visiting a Contracting State a resident of
the other Contracting State and who is present in the
first-mentioned State solely for the purpose of his education
or training shall be exempt from tax in that first-mentioned
State on the following payments or income received or derived
by him for the purpose of his maintenance, education or
training:
(a) payments derived from sources outside that Contracting
State for the purpose of his maintenance, education, study,
research or training;
(b) grants, scholarships or awards supplied by the
Government, or a scientific, educational, cultural or other
tax-exempt organization; and
(c) income derived from personal services in connection with
his education or training performed in that Contracting State.

Article 21
Teachers and Researchers
An individual who is, or immediately before visiting a
Contracting State, was a resident of the other Contracting
State and, at the invitation of a university, college, school
or other educational institution or scientific research
institution recognized as non-profitable by the Government of
the first-mentioned Contracting State, is present in the
first-mentioned Contracting State solely for the purpose of
teaching, giving lectures or conducting research, shall be
exempt from tax in the first-mentioned Contracting State, for
a period of three years from the date of his first arrival in
the first-mentioned Contracting State in respect of
remuneration for such teaching, lectures or research.
Article 22
Other Income
1. Items of income of a resident of a Contracting State,
wherever arising, not dealt with in the foregoing Articles of
this Agreement shall be taxable only in that Contracting
State.
2. The provisions of paragraph 1 shall not apply to income,
other than income from immovable property as defined in
paragraph 2 of Article 6, if the recipient of such income,
being a resident of a Contracting State, carries on business
in the other Contracting State through a permanent
establishment situated therein, or performs in that other
Contracting State independent personal services from a fixed
base situated therein, and the right or property in respect of
which the income is paid is effectively connected with such
permanent establishment or fixed base. In such case the
provisions of Article 7 or Article 14, as the case may be,
shall apply.
Article 23
Methods for the Elimination of Double Taxation
1. In the case of a resident of China, double taxation shall
be avoided as follows:
(a) Where a resident of China derives income from Korea, the
amount of tax on that income payable under the laws of Korean
tax and in accordance with the provisions of this Agreement,
may be credited against the Chinese tax imposed on that
resident. The amount of credit, however, shall not exceed the
amount of the Chinese tax on that income computed in
accordance with the taxation laws and regulations of China.
(b) Where the income derived from Korea is a dividend paid
by a company which is a resident of Korea to a company which
is a resident of China and which owns not less than 10 percent
of the shares of the company paying the dividend, the credit
shall take into account the tax paid to Korea by the company
paying the dividend in respect of its income.
2. In the case of a resident of Korea, double taxation shall
be avoided as follows:
Subject to the provisions of Korean tax law regarding the
allowance as a credit against Korean tax of tax payable in any
country other than Korea (which shall not affect the general
principle hereof), the Chinese tax payable (excluding, in the
case of dividend, tax payable in respect of profits out of
which the dividend is paid) under the laws of China and in
accordance with this Agreement, whether directly or by
deduction, in respect of income from sources within China
shall be allowed as a credit against Korean tax payable in
respect of that income. The credit shall not, however, exceed
that proportion of Korean tax which the income from sources
within China bears to the entire income subject to Korean tax.

3. The tax payable in a Contracting State mentioned in
paragraphs 1 and 2 of this Article, shall be deemed to include
the tax which would have been payable but for the legal
provisions concerning tax reduction, exemption or other tax
incentives of the Contracting State for the promotion of
economic development.
For the purpose of this paragraph, the amount of tax shall
be deemed to be 10 per cent of the gross amount of the
dividends, interest and royalties in the case of paragraph 2
of Article 10, paragraph 2 of Article 11 and paragraph 2 of
Article 12, respectively.
4. The provisions of paragraph 3 of this Article shall apply
only during a period of ten years starting from the first day
of the calendar year following that in which this Agreement
enters into force in accordance with the provisions of Article
28.
Article 24
Non-Discrimination
1. Nationals of a Contracting State shall not be subjected
in the other Contracting State to any taxation or any
requirement connected therewith, which is other or more
burdensome than the taxation and connected requirements to
which nationals of that other Contracting State in the same
circumstances are or may be subjected. The provisions of this
paragraph shall, notwithstanding the provisions of Article 1,
also apply to persons who are not residents of one or both of
the Contracting States.
2. The taxation on a permanent establishment which an
enterprise of a Contracting State has in the other Contracting
State shall not be less favourably levied in that other
Contracting State than the taxation levied on enterprises of
that other Contracting State carrying on the same activities.
The provisions of this paragraph shall not be construed as
obliging a Contracting State to grant to residents of the
other Contracting State any personal allowances, reliefs and
reductions for taxation purposes on account of civil status or
family responsibilities which it grants to its own residents.
3. Except where the provisions of Article 9, paragraph 7 of
Article 11, or paragraph 6 of Article 12, apply, interest,
royalties and other disbursements paid by an enterprise of a
Contracting State to a resident of the other Contracting State
shall, for the purpose of determining the taxable profits of
such enterprise, be deductible under the same conditions as if
they had been paid to a resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which
is wholly or partly owned or controlled, directly or
indirectly, by one or more residents of the other Contracting
State, shall not be subjected in the first-mentioned State to
any taxation or any requirement connected therewith which is
other or more burdensome than the taxation and connected
requirements to which other similar enterprises of the
first-mentioned State are or may be subjected.
5. The provisions of this Article shall, notwithstanding the
provisions of Article 2, apply to taxes of every kind and
description.
Article 25
Mutual Agreement Procedure
1. Where a person considers that the actions of one or both
of the Contracting States result or will result for him in
taxation not in accordance with the provisions of this
Agreement, he may, irrespective of the remedies provided by
the domestic law of those States, present his case to the
competent authority of the Contracting State of which he is a
resident or, if his case comes under paragraph 1 of Article
24, to that of the Contracting State of which he is a
national. The case must be presented within three years from
the first notification of the action resulting in taxation not
in accordance with the provisions of the Agreement.
2. The competent authority shall endeavour, if the objection
appears to it to be justified and if it is not itself able to
arrive at a satisfactory solution, to resolve the case by
mutual agreement with the competent authority of the other
Contracting State, with a view to the avoidance of taxation
which is not in accordance with the provisions of this
Agreement. Any agreement reached shall be implemented
notwithstanding any time limits in the domestic law of the
Contracting States.
3. The competent authorities of the Contracting States shall
endeavour to resolve by mutual agreement any difficulties or
doubts arising as to the interpretation or application of the
Agreement. They may also consult together for the elimination
of double taxation in cases not provided for in this
Agreement.
4. The competent authorities of the Contracting States may
communicate with each other directly for the purpose of
reaching an agreement in the sense of paragraphs 2 and 3. When
it seems advisable for reaching agreement, representatives of
the competent authorities of the Contracting States may meet
together for an oral exchange of opinions.
Article 26
Exchange of Information
1. The competent authorities of the Contracting States shall
exchange such information as is necessary for carrying out the
provisions of this Agreement or of the domestic laws of the
Contracting States concerning taxes covered by the Agreement,
insofar as the taxation thereunder is not contrary to this
Agreement, in particular for the prevention of evasion of such
taxes. The exchange of information is not restricted by
Article 1. Any information received by a Contracting State
shall be treated as secret in the same manner as information
obtained under the domestic laws of that State and shall be
disclosed only to persons or authorities (including courts or
administrative bodies) involved in assessment or collection
of, the enforcement or prosecution in respect of, or the
determination of appeals in relation to, the taxes covered by
the Agreement. Such persons or authorities shall use the
information only for such purposes. They may disclose the
information in public court proceedings or in judicial
decisions.
2. In no case shall the provisions of paragraph 1 be
construed so as to impose on a Contracting State the
obligation:
(a) to carry out administrative measures at variance with
the laws and administrative practice of that or of the other
Contracting State;
(b) to supply information which is not obtainable under the
laws or in the normal course of the administration of that or
of the other Contracting State;
(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or
trade process, or information, the disclosure of which would
be contrary to public policy (ordre public) .
Article 27
Diplomatic Agents and Consular Officers
Nothing in this Agreement shall affect the fiscal privileges
of diplomatic agents or consular officers under the general
rules of international law or under the provisions of special
agreements.
Article 28
Entry Into Force
1. This Agreement shall enter into force on the thirtieth
day after the date on which diplomatic notes indicating the
completion of internal legal procedures necessary in each
country for the entry into force of this Agreement have been
exchanged.
2. The Agreement shall have effect:
(a) in respect of taxes withheld at the source on or after
the first day of January in the year following that in which
this Agreement enters into force; and
(b) in respect of other taxes for the taxable year beginning
on or after the first day of January in the year following
that in which this Agreement enters into force.
Article 29
Termination
This Agreement shall remain in force indefinitely but either
of the Contracting States may, on or before the thirtieth day
of June in any calendar year beginning after the expiration of
a period of five years from the date of its entry into force,
give written notice of termination to the other Contracting
State through the diplomatic channels. In such event, this
Agreement shall cease to have effect:
(a) in respect of taxes withheld at the source on or after
the first day of January of the calendar year next following
that in which the notice is given; and
(b) in respect of other taxes for any taxable year beginning
on or after the first day of January of the calendar year next
following that in which the notice is given.
IN WITNESS WHEREOF the undersigned, duly authorized thereto
by their respective Governments, have signed this Agreement.
DONE in duplicate at Beijing this 28th day of March of the
year one thousand nine hundred and ninety four in the Chinese,
Korean and English languages, all texts being equally
authentic. In case of any divergence of interpretation, the
English text shall prevail.



For the Government
For the Government
of the People's
of the Republic
Republic of China
of Korea





PROTOCOL
At the signing of the Agreement between the Government of
the People’s Republic of China and the Government of the
Republic of Korea for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income,
both sides have agreed upon the following provisions which
form an integral part of the Agreement.
1. In respect of Article 8 “Shipping and Air Transport”, it
is understood that China shall exempt the business tax on the
operation of ships or aircraft in international traffic by an
enterprise of Korea and Korea shall exempt the value added tax
on the operation of ships or aircraft in international traffic
by an enterprise of China.
2. In respect of Article 15 “Dependent Personal Services”,
it is understood that employees who are sent by the shipping
or air transportation enterprises of a Contracting State to
the other Contracting State shall be taxable on their
remuneration only in the first-mentioned Contracting State.
IN WITNESS WHEREOF the undersigned, duly authorized thereto
by their respective Governments, have signed this Protocol.
DONE in duplicate at Beijing this 28th day of March of the
year one thousand nine hundred and ninety four in the Chinese,
Korean and English languages, all texts being equally
authentic.
In case of any divergence of interpretation, the English
text shall prevail.

For the Government
For the Government
of the People's
of the Republic
Republic of China
of Korea





MEMORANDUM OF UNDERSTANDING ON THE TAX AGREEMENT BETWEEN THE
GOVERNMENTS OF THE PEOPLE’S REPUBLIC OF CHINA AND THE REPUBLIC
OF KOREA
The competent authorities of the Government of the Republic
of Korea and the Government of the People’s Republic of China
held negotiation with respect to paragraph 3 of Article 11 and
paragraphs 1 and 2 of Article 19 and agreed upon the
followings with a view to prompt and appropriate
implementation of the Agreement between the Government of the
Republic of Korea and the Government of the People’s Republic
of China for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income:
1. For the purpose of paragraph 3 of Article 11, the term “the central bank and financial institution performing
functions of a governmental nature” means:
(a) in the case of China:
(i) the People’s Bank of China;
(ii) the State Development Bank of China;
(iii) the Export-Import Bank of China;
(iv) the Agricultural Development Bank of China; and
(v) other financial institutions which are agreed by the competent authorities of the Contracting States through mutual agreement;
(b) in the case of Korea:
(i) the Bank of Korea;
(ii) the Korea Development Bank;
(iii) the Korea Export-Import Bank; and
(iv) other financial institutions which are agreed by the competent authorities of the Contracting States through mutual agreement.
2. The provisions of paragraphs 1 and 2 of Article 19 shall likewise apply in respect of renumeration or pensions paid by:
(a) in the case of China:
(i) the People’s Bank of China;
(ii) the State Development Bank of China;
(iii) the Export-Import Bank of China;
(iv) the Agricultural Development Bank of China;
(v) the China Council for the Promotion of International Trade; and
(vi) the equivalent organizations to “the Korea National Tourism Corporation” in terms of their ownerships and
functions;
(b) in the case of Korea:
(i) the Bank of Korea;
(ii) the Korea Development Bank;
(iii) the Korea Export-Import Bank;
(iv) the Korea Trade Promotion Corporation; and
(v) the Korea National Tourism Corporation.
DONE in duplicate at BEIJING this 28 day of March, 1994 in the English language, each text being equally authentic.

For the Government                     For the Government
of the People's                        of the Republic
Republic of China                      of Korea
　

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