FROM THE OFFICE OF PUBLIC AFFAIRS

The United States and the Republic of Korea will begin negotiations of a new income tax treaty in Seoul on November 9, 1998. The new treaty would replace the treaty currently in force between the two countries, which was signed on June 4, 1976.

There have been substantial changes in the tax laws of both countries during the past twenty years and the present treaty no longer adequately reflects current treaty policies of the United States or of Korea. The negotiations will be based on the U.S. and Korean model treaties both of which draw heavily on the OECD model. The treaty will deal with the taxation of income from business activities, investment, and personal services derived by residents of one country from the other. It will contain provisions to avoid double taxation, to ensure nondiscrimination, and to prevent abuse of the treaty. It will also provide for exchange of information and other administrative cooperation between the tax authorities of the two countries.

The Treasury Department invites comments from the public regarding the upcoming negotiations. Persons wishing to comment on the proposed treaty are invited to send their written comments to Joseph H. Guttentag, Deputy Assistant Secretary (International Tax Affairs), Room 1334 Main Treasury, Washington, D.C. 20220. They may also submit comments by fax to (202) 622-0605.