Tax Treaties and Cross-Border Taxation in North Korea

Cross-border taxation in North Korea covers how the country taxes foreign investments, income from abroad, and transactions with non-residents. This guide provides an overview of the key rules and considerations for international investors.

Withholding Taxes

North Korea imposes withholding tax on payments to non-residents:

Tax Treaties (DTTs)

North Korea has very limited double tax treaty coverage. As of 2026, the DPRK has signed tax treaties with a small number of countries. Where treaties apply, they may reduce withholding tax rates and provide mechanisms for resolving double taxation disputes.

Transfer Pricing

North Korea follows principles for related-party transactions. Transfer pricing documentation may be required for transactions between foreign-invested enterprises and their parent companies.

Foreign Tax Credit

Resident taxpayers may claim a foreign tax credit for taxes paid abroad on foreign-source income, subject to applicable limits.

Exchange of Information

North Korea has limited participation in international tax cooperation. The country is not a member of the OECD Inclusive Framework and has limited exchange of information agreements.

Inbound Investment

Foreign investors in North Korea are subject to:

• CIT on DPRK-source income at 25% for foreign investment enterprises
• Withholding taxes on distributions at 20%
• Foreign Investment Law requirements and approvals

Outbound Investment

North Korean entities investing abroad are subject to limited reporting. Foreign tax credits may apply where reciprocal arrangements exist.