Shinhan Investment Corp. Sells Tax-Free Dollar-Denominated KEPCO Bonds

Shinhan Investment Corp. announced on the 20th that it will sell tax-exempt dollar-denominated bonds issued by Korea Electric Power Corporation (KEPCO).

These bonds were foreign currency bonds issued with a 30-year maturity (maturing in 2027) during the 1997 International Monetary Fund (IMF) foreign exchange crisis to raise foreign currency. According to the tax exemption regulation law at that time, interest income tax is exempted on these bonds. If domestic residents purchase foreign currency-denominated bonds issued by the central or local governments or domestic corporations before December 31, 1998, the interest income is exempt from income tax and is not subject to comprehensive taxation.

However, under the Special Taxation Act on Rural Development, individuals are subject to a 1.4% rural special tax, which is 10% of the exempted interest income tax, and corporations are subject to a 2.8% rural special tax, which is 20% of the exempted interest income tax.

Kim Ki-dong, Head of the FICC Solutions Division at Shinhan Investment Corp., stated, "In a situation where tax-exempt bonds are rare, we launched these bonds based on Shinhan Investment Corp.'s product supply capabilities. This product will be noteworthy not only for customers sensitive to the comprehensive financial income tax base but also for investors who need a stable dollar cash flow."