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MSCI Says South Korea May Harm Stock Market With Tax Plan

  • Nation has proposed increasing foreigners’ capital gains taxes
  • MSCI’s decisions guide trillions of dollars of investments
Commuters In Seoul Ahead Of GDP Figures

Photographer: SeongJoon Cho/Bloomberg

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MSCI Inc., whose decisions on stock indexes guide the investment of trillions of dollars, said South Korea’s proposed changes to capital gains taxes could make the nation’s market harder to access.

Under a draft plan, some foreign investors would face capital gains taxes if they hold as little as 5 percent of a South Korean company’s stock, a big change from the current 25 percent threshold. This would cover investors from nations that South Korea doesn’t have a tax treaty with, which include Hong Kong, Singapore, Luxembourg and the Cayman Islands, according to a recent Bloomberg Gadfly column.