AGREEMENT

BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF KOREA

AND THE GOVERNMENT OF THE KYRGYZ REPUBLIC

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND CAPITAL

Signed at Seoul December 11, 2012

Entered into force November 22, 2013

The Government of the Republic of Korea and the Government of the Kyrgyz Republic,

Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital,

Have agreed as follows:

ARTICLE 1

Persons Covered

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 and on capital imposed on behalf of a Contracting State or of its political or administrative subdivisions or local authorities, irrespective of the manner in which they are levied.

2.	There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.

3.	The existing taxes to which the Agreement shall apply are in particular:

a)	In the Republic of Korea:

(i)	the income tax;

(ii)	the corporation tax;

(iii)	the special tax for rural development; and

(iv)	the local income tax;

(hereinafter referred to as "Korean tax");

b)	In the Kyrgyz Republic:

(i)	Tax on profits and other revenues of legal persons;

(ii)	Income Tax on individuals; and

(iii)	Immovable Property Tax;

(hereinafter referred to as "Kyrgyzstan tax").

4.	The 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. The competent authorities of the Contracting States shall notify each other of any significant changes, which have been made in their respective taxation laws.

ARTICLE 3

General Definitions

1.	For the purposes of the Agreement, unless the context otherwise requires:

a)	the term "Korea" means the territory of the Republic of Korea including any area adjacent to the territorial sea of the Republic of Korea which, in accordance with international law, has been or may hereafter be designated under the laws of the Republic of Korea as an area within which the sovereign rights or jurisdiction of the Republic of Korea with respect to the sea-bed and sub-soil and their natural resources may be exercised;

b)	the term "Kyrgyzstan" means the Kyrgyz Republic. When used in the geographical sense, the term "Kyrgyzstan" means the territory on which the Kyrgyz Republic carries out sovereign rights and jurisdiction in accordance with the international law and in which the taxation laws of the Kyrgyz Republic are in force;

c)	the terms "a Contracting State" and "the other Contracting State" mean the Republic of Korea and the Kyrgyz Republic as the context requires;

d)	the term "person" includes an individual, a company and any other body of persons;

e)	the term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes;

f)	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;

g)	the term "international traffic" means any transport by a ship or aircraft, or road vehicle operated by an enterprise of a Contracting State, except when the ship or aircraft or road vehicle is operated solely between places in the other Contracting State;

h)	the term "competent authority" means:

(i)	in Korea, the Minister of Strategy and Finance or his authorized representative;

(ii)	in the Kyrgyz Republic, the Ministry of Economy or its authorized representative;

i)	the term "national" means:

(i)	any individual possessing the nationality of a Contracting State; and

(ii)	any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.

2.	As regards the application of the Agreement at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

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 State, is liable to tax therein by reason of his domicile, residence, place of head or main office, place of management or any other criterion of a similar nature, and also includes that State and any political or administrative subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein.

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 only of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States he shall be deemed to be a resident only of the 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 State, he shall be deemed to be a resident only of the State in which he has an habitual abode;

c)	if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State in which he is a national;

d)	if he is a national of both 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, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

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;

f)	a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; and

g)	an agricultural, pastoral or forestry property.

3.	The term "permanent establishment" also encompasses:

a)	a building site, or construction or installation project, but only if such site or project lasts more than twelve months;

b)	the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or connected project) within the country for a period or periods aggregating more than twelve months.

4.	Notwithstanding the preceding provisions of this Article, 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 paragraph 6 applies – is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that 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 shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that 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.

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 that it has under the laws 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 or road vehicle 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 the 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 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 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 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 permanent  establishment, including executive and general administrative expenses so incurred,   whether in the State in which the permanent establishment is situated or elsewhere.

4.	No profits shall be attributed to a permanent establishment by reason of the mere purchase by the permanent establishment of goods or merchandise for the enterprise.

5.	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.

6.	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

International Traffic

1.	Profits derived by an enterprise of a Contracting State from the operation of ships, aircraft or road vehicle in international traffic shall be taxable only in that State.

2.	The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

3.	For the purposes of this Article, the terms "profits from the operation of ships, aircraft or road vehicle in international traffic" shall include profits from:

a)	the rental of ships or aircraft or road vehicle fully equipped, manned and supplied;

b)	the occasional rental of a ship or aircraft or road vehicle on a bareboat charter; and

c)	the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) used for the transport of goods and merchandise;

where such rental or such use, maintenance or rental, as the case may be, is incidental to the operation of ships, aircraft or road vehicle in international traffic.

ARTICLE 9

Associated Enterprises

1.	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.

2.	Where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other.

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 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 beneficial owner of the dividends is a resident of the other Contracting State, 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, "jouissance" shares or "jouissance" rights, mining shares, founders' 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 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 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 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 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 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 State.

2.	However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.

3.	Notwithstanding the provisions of paragraph 2,

a)	interest arising in a Contracting State and derived by the Government of the other Contracting State including political or administrative subdivisions or local authorities thereof, the Central Bank of that other State or any financial institution performing functions of a governmental nature shall be exempt from tax in the first-mentioned State;

b)	interest paid in connection with the sale on credit of any industrial, commercial or scientific equipment, or paid in connection with the sale on credit of any merchandise by one enterprise to another enterprise shall be taxable only in the Contracting State of which the recipient is a resident if such recipient is the beneficial owner of the interest.

4.	For the purpose of paragraph 3, the phrase "the Central Bank and/or financial institution performing functions of a governmental nature" means:

a)	in Korea:

(i)	the Bank of Korea;

(ii)	the Korea Export-Import Bank;

(iii)	the Korea Export Insurance Corporation; and

(iv)	such other financial institution performing functions of a governmental nature as may be specified and agreed upon in letters exchanged between the competent authorities of the Contracting States;

b)	in Kyrgyzstan:

(i)	the National Bank of the Kyrgyz Republic; and

(ii)	such other financial institution performing functions of a governmental nature as may be specified and agreed upon in letters exchanged between the competent authorities of the Contracting States.

5.	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. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.

6.	The provisions of paragraph 1 and 2 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 State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such cases, the provisions of Article 7 or Article 14, as the case may be, shall apply.

7.	Interest shall be deemed to arise in a Contracting State when the payer is a resident of that 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 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 State in which the permanent establishment or fixed base is situated.

8.	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-claim 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 State.

2.	However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed:

a)	5 per cent of the gross amount of such royalties which are paid for the use of, or the right to use, industrial, commercial or scientific equipment; and

b)	10 per cent of the gross amount of such royalties in all other cases.

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, any patent, 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 paragraph 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 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 cases, 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 a resident of that State. Where, however, the person paying the royalties, whether the payer 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 obligation 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 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 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 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 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 with the whole enterprise) or of such fixed base, may be taxed in that other State.

3.	Gains derived by a resident of a Contracting State from the alienation of ships or aircraft or road vehicle operated in international traffic, or movable property pertaining to the operation of such ships or aircraft or road vehicle, shall be taxable only in that Contracting State.

4.	Gains derived by a resident of a Contracting State from the alienation of shares deriving more than 50 per cent of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State.

5.	Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 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 State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other State but only so much of it as is attributable to that fixed base.

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 and 21, salaries, wages and other similar remuneration derived by a resident of the Contracting State in respect of an employment shall be taxable only in that 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 State.

2.	Notwithstanding the provisions of paragraph 1, the remuneration derived by a resident of the 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 that other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned,

b)	the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

c)	the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

3.	Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft or road vehicle operated in international traffic by an enterprise of a Contracting State may be taxable only in that State.

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 or any other similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

ARTICLE 17

Artistes and Sports Persons

1.	Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as theatre, motion picture, radio or television artiste, or a musician, or as a sports person, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

2.	Where income in respect of personal activities exercised by an entertainer or a sports person in his capacity as such accrues not to the entertainer or sports person 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 sports person are exercised.

3.	Income derived by a resident of a Contracting State from activities exercised in the other Contracting State as envisaged in paragraphs 1 and 2 of this Article, shall be exempt from tax in that other State if the visit to the other State is supported wholly or mainly by public funds of the first-mentioned Contracting State, a political or administrative subdivision or local authorities thereof, or takes place under a cultural agreement or arrangement between the Governments of the Contracting States.

ARTICLE 18

Pensions and Annuities

1.	Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration and annuities paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.

2.	The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.

ARTICLE 19

Government Service

1.	a)	Salaries, wages and other similar remuneration paid by a Contracting State or a political or administrative subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b)	However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:

(i)	is a national of that State; or

(ii)	did not become a resident of that State solely for the purpose of rendering the services.

2.	a)	Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or an political or administrative subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that 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 State.

3.	The provisions of Articles 15, 16, 17, and 18 shall apply to salaries, wages, and other similar remuneration or pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political or administrative subdivision or a local authority thereof.

4.	The provisions of paragraphs 1, 2 and 3 of this Article shall likewise apply in respect of salaries, wages and other similar remuneration or pensions paid by:

a)	in the case of Korea:

the Bank of Korea, the Export-Import Bank of Korea, the Korea Export Insurance Corporation, and other institutions performing functions of a governmental nature as may be specified and agreed upon in letters exchanged between the competent authorities of the Contracting States;

b)	in the case of Kyrgyzstan:

the National Bank of the Kyrgyz Republic, and other institutions performing functions of a governmental nature as may be specified and agreed upon in letters exchanged between the competent authorities of the Contracting States.

ARTICLE 20

Students

Payments which a student or business apprentice 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 receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 21

Professors and Teachers

1. An individual who visits a Contracting State for the purpose of teaching or carrying out research at an university, college, school, or other similar educational institution recognized as non-profit organization by the Government of that Contracting State and who is or was immediately before that visit a resident of the other Contracting State shall be exempted from taxation in the first-mentioned Contracting State on any remuneration for such teaching or research for a period not exceeding 2 years from the date of his first visit for that purpose.

2. The provisions of paragraph 1 shall not apply to income from research if such research is undertaken not for public interest but primarily for the private benefit of a specific person or persons.

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 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 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

Capital

1.	Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State.

2.	Capital represented by 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 may be taxed in that other State.

3.	Capital represented by ships, aircraft or road vehicle operated by a resident of a Contracting State in international traffic and by movable property pertaining to the operation of such ships, aircraft or road vehicle, shall be taxable only in that State.

4.	All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

ARTICLE 24

Method for the Elimination of Double Taxation

1.	Subject to the provisions of Korean tax law regarding the allowance as credit against Korean tax of tax payable in any country other than Korea (which shall not affect the general principle thereof);

a)	Where a resident of Korea derives income from Kyrgyzstan which may be taxed in Kyrgyzstan under the laws of Kyrgyzstan in accordance with the provisions of this Agreement, in respect of that income, the amount of Kyrgyzstan tax payable shall be allowed as a credit against the Korean tax payable imposed on that resident. The amount of credit shall not, however, exceed that part of Korean tax as computed before the credit is given, which is appropriate to that income;

b)	Where the income derived from Kyrgyzstan is a dividend paid by a company which is a resident of Kyrgyzstan to a company which is a resident of Korea which owns not less than 20 per cent of the total shares issued by that company, the credit shall take into account the Kyrgyzstan tax payable by the company in respect of the profits out of which such dividend is paid.

2.	In the case of Kyrgyzstan, double taxation shall be avoided as follows:

a)	Where a resident of Kyrgyzstan derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in Korea, Kyrgyzstan shall allow:

(i)	as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Korea

(ii)	as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in Korea

The amount of the tax deducted in accordance with the aforementioned provisions shall not exceed the tax, which would have been charged to this income by the rates effective in Kyrgyzstan.

b)	Where a resident of Kyrgyzstan derives income or owns capital which in accordance with the provisions of this Agreement shall be taxable only in Korea, Kyrgyzstan may include this income or capital in the tax base, but only for the purpose of establishing the tax rate for such income or capital being applicable for taxation in Kyrgyzstan.

ARTICLE 25

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 State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.

2.	Stateless persons who are residents of a Contracting State shall not be subjected in either 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 the State concerned in the same circumstances are or may be subjected.

3.	The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision 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.

4.	Except where the provisions of paragraph 1 of Article 9, paragraph 8 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. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State.

5.	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.

6.	The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description.

ARTICLE 26

Mutual Agreement Procedure

1.	Where a person considers that the actions of one or both of the Contracting States results 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 endeavor, 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 not in accordance with 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 endeavor to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement.

4.	The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission of themselves or their representatives, for the purpose of reaching an agreement in the sense of preceding paragraphs.

ARTICLE 27

Exchange of Information

1.	The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political or administrative subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2.

2.	Any information received under paragraph 1 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 and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. 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.

3.	In no case shall the provisions of paragraph 1 and 2 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 28

Members of Diplomatic Missions and Consular Posts

Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

ARTICLE 29

Limitation on Benefit

Nothing in this Agreement shall affect the application of the domestic provisions of a Contracting State to prevent tax evasion or avoidance, if the main purpose or one of the main purposes of any person concerned with the creation or assignment of the rights in respect of which the income dealt with in the Agreement is paid was to take advantage of the Articles of this Agreement by means of that creation or assignment.

ARTICLE 30

Entry into Force

1.	The Governments of the Contracting States shall notify each other through diplomatic channels of the completion of the procedure required by their respective law for the bringing into force of this Agreement.

2.	This Agreement shall enter into force on the date of the latter of the notifications referred to in paragraph 1 of this Article and its provisions shall have effect:

a)	in respect of taxes withheld at source, on amounts payable on or after the first day of January of the year next following the year of the entry into force of the Agreement;

b)	in respect of the other taxes, for taxation years beginning on or after the first day of January of the year in which the Agreement entered into force.

3.	The Contracting States by mutual agreement may to introduce amendments into the Agreement by separate Protocol, the provisions of which shall form an integral part of this Agreement.

ARTICLE 31

Termination

This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement, through diplomatic channels, by giving written notice of termination at least six month before the end of any calendar year from the fifth year following that in which the Agreement entered into force. In such event, the Agreement shall cease to have effect in both Contracting States:

a)	in respect of taxes withheld at source, on amounts payable on or after the first day of January of the calendar year next following that in which the notice was given.

b)	in respect of the other taxes, for taxation years beginning on or after the first day of January of the calendar year next following that in which the notice was given.

IN WITNESS WHEREOF, the undersigned, duly authorized thereto by their respective Governments, have signed this Agreement.

DONE in duplicate at Seoul this 11st day of December, 2012, in the Korean, Kyrgyz, Russian and English languages, all texts being equally authentic. In the case of any divergence of interpretation, the English text shall prevail.

FOR THE GOVERNMENT                 FOR THE GOVERNMENT

OF THE REPUBLIC OF KOREA           OF THE KYRGYZ REPUBLIC

PROTOCOL

At the moment of signing of the Agreement between the Government of the Republic of Korea and the Government of the Kyrgyz Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital, the undersigned have agreed that the following provisions shall form an integral part of the Agreement:

In respect of paragraphs 1 and 2 of Article 7, it is understood that, in determining profits attributable to the permanent establishment of an enterprise of a Contracting State, only those profits arising from the activities of the permanent establishment may be attributed to that permanent establishment. This means, in particular, that in determining the profits arising from activities of a building site or construction or installation project which constitutes a permanent establishment, profits arising from activities performed outside the Contracting State in which the permanent establishment is located, shall not be attributed to that permanent establishment.

IN WITNESS WHEREOF, the undersigned, duly authorized thereto by their respective Governments, have signed this Protocol.

DONE in duplicate at Seoul this 11st day of December, 2012, in the Korean, Kyrgyz, Russian and English languages, all texts being equally authentic. In the case of any divergence of interpretation, the English text shall prevail.

FOR THE GOVERNMENT                 FOR THE GOVERNMENT

OF THE REPUBLIC OF KOREA           OF THE KYRGYZ REPUBLIC