Tax on Investment Income in North Korea

Investment income in North Korea is subject to various tax treatments depending on the type of income and the taxpayer's status. Given the limited private investment landscape, most investment activity involves foreign-invested enterprises.

Dividend Income

Individual Taxation

Dividends received by individual residents are treated as ordinary income and subject to progressive PIT rates (0-20%). Non-residents are subject to a final withholding tax of 20%.

Corporate Taxation

Dividends received by a foreign-invested enterprise may be subject to CIT at 25%. Dividends paid to foreign parent companies are subject to 20% withholding tax.

Interest Income

Individual Taxation

Interest income earned by individuals is treated as ordinary income:

• Bank deposits: Taxed at PIT rates (0-20%)
• Non-residents: Subject to 20% withholding tax

Corporate Taxation

Interest income received by corporations is included in taxable income and taxed at the applicable CIT rate.

Rental Income

Rental income from property is taxed as follows:

• Individuals: Net rental income subject to progressive PIT rates (0-20%)
• Corporations: Rental income included in business income, taxed at 25% for foreign enterprises

Capital Gains

Capital gains on investments are generally taxed as ordinary income at progressive PIT rates (0-20%) for individuals and 25% CIT for foreign enterprises.

Foreign Investment Income

North Korea taxes foreign investment enterprises on DPRK-source income. Foreign tax credits may be available under limited tax treaties.

Reporting Requirements

Investment income must be declared in the annual tax return for individuals. Foreign-invested enterprises report investment income as part of their corporate tax filing.