MOFA: Acquisition Tax Exemption Supported for Chinese Government's Yongsan Land Purchase in Accordance with International Law

The South Korean Ministry of Foreign Affairs has confirmed that it provided administrative support, including an acquisition tax exemption, to the Chinese government during its purchase of land in the Itaewon area of Yongsan-gu, Seoul at the end of 2018. This was in accordance with the Vienna Convention, which stipulates privileges and immunities for diplomats and diplomatic missions stationed in host countries.

On May 15, an official from the Ministry of Foreign Affairs responded to media inquiries regarding the Chinese Embassy's land purchase in Itaewon, stating, "The Ministry of Foreign Affairs supported the administrative procedures related to the acquisition tax exemption for the land acquired by the Chinese Embassy in Korea, in accordance with relevant domestic laws and international law." According to the Vienna Convention, the sending state and the head of mission are exempt from taxes and charges, with certain exceptions, and this exemption also applies to real estate.

The ministry official further explained, "There are no regulations requiring diplomatic missions in Korea to obtain special approval from or report to our government when purchasing land," and added, "During the land acquisition process, diplomatic missions in Korea are entitled to tax exemption as part of the privileges and immunities they enjoy as diplomatic missions." The official also emphasized, "Support was provided in accordance with the provisions set forth in the Vienna Convention."

However, if a diplomatic mission in Korea constructs a building on the acquired land, consultation procedures with the South Korean government regarding the purpose and use of the building are required. In the case of the land in Yongsan-gu purchased by the Chinese Embassy, it was confirmed that since its acquisition in December 2018, the existing commercial buildings and residences on the site have been left vacant and have not been put to actual use.

When asked whether other diplomatic missions in Korea, aside from China, have purchased land domestically, the official stated, "Since there is no obligation to obtain approval from or report to our government at the time of purchase, we may provide administrative support such as acquisition tax exemption, but we do not maintain a comprehensive list of such acquisitions," and added, "We do not have sufficient information to provide."