North Korea (DPRK) imposes no conventional corporate tax on domestic state-owned enterprises, which instead remit profit directly to the state; foreign-invested businesses are taxed under the DPRK Law on Foreign Investment at 25% of net profit generally (14% in the Rason Special Economic Zone, 10% in preferential sectors), confirmed directly against the primary statutory text via WIPO Lex, as described elsewhere on this page.
A specific statutory tax year-end for foreign-invested enterprises is not itemized in the primary statutory text (DPRK Law on Foreign Investment, via WIPO Lex); confirm current filing requirements directly with a specialist in DPRK-related tax and sanctions matters before relying on this page.
Confirmed directly against the primary statutory text (DPRK Law on Foreign Investment, Article 9, via WIPO Lex): no conventional corporate tax applies to domestic state-owned enterprises (profit remittance to the state instead); foreign-invested businesses pay enterprise income tax at 25% of net profit generally, 14% in the Rason Special Economic Zone, and 10% in preferential sectors (state-of-the-art technology, natural resources development, infrastructure construction, scientific research and technical development). Separately, under Article 10 of the same law, other DPRK-source income earned by a foreign enterprise - dividends, interest, rent, royalties, and similar - is taxed at 20% generally, or 10% in the Rason zone, distinct from the enterprise income tax rate on business profits. Qualifying foreign-invested businesses in a priority sector or in Rason may receive a full exemption from enterprise income tax for 3 years from the first profitable year, plus up to a 50% reduction for the following 2 years, provided the business operates for more than 10 years - if withdrawn or dissolved before the 10-year mark, the exempted or reduced tax is collected retroactively.
Personal income tax was officially abolished for DPRK citizens in 1974 under the Tax Abolition Law; foreign nationals working in special economic zones may be subject to zone-specific tax regulations.
No general VAT or sales tax; the centrally planned economy relies on state-controlled pricing rather than consumption taxation.
The law applies to any foreign-invested business and foreign individual doing business or earning income within DPRK territory, and notably also applies to any Korean compatriot residing outside DPRK territory who does business or earns income within DPRK territory. Standard residency-based taxation concepts do not apply to DPRK citizens generally, given personal income tax was officially abolished in 1974. Foreign investors and workers in special economic zones are subject to zone-specific tax regulations.
The DPRK Law on Foreign Investment applies to any foreign-invested business and foreign individual doing business or earning income within DPRK territory, as described elsewhere on this page; a foreign enterprise's DPRK-source income attributable to its presence in the country is taxed under Article 9 (enterprise income tax on business profits) or Article 10 (other DPRK-source income such as dividends, interest, rent, and royalties, taxed at 20% generally or 10% in the Rason zone), rather than through a codified PE test comparable to a full OECD Model treaty article.
Confirmed against the primary statutory text: DPRK has no Western-style CFC attribution regime. However, Article 9 of the Law on Foreign Investment requires a foreign-invested enterprise registered in DPRK to also pay enterprise income tax on income earned through its branches, agencies, representatives, or subsidiaries established outside DPRK territory - a worldwide-income taxation clause specific to DPRK-registered foreign-invested enterprises, distinct in mechanism from (though overlapping in practical effect with) a CFC attribution regime.
Checked directly against the full text of the DPRK Law on Foreign Investment and the related Law on Foreign-Invested Business and Foreign Individual Tax (both via WIPO Lex) - neither contains a debt-to-equity ratio or related-party interest-deduction cap. This is a genuine absence rather than an unresolved gap: these are the two primary statutes governing foreign-invested enterprise taxation in DPRK, and both were reviewed for this specific point. A thin capitalization rule could still exist in unpublished implementing regulations not available in translation, given DPRK's generally limited public legal documentation, so this should be treated as "not found in the available primary statutory text" rather than an absolute guarantee.
North Korea classifies entities under its own domestic Law on Foreign Investment rather than offering an elective check-the-box system, and no ATAD2-style anti-hybrid mismatch regime addressing double-deduction or deduction-without-inclusion outcomes has been identified in the primary statutory text reviewed; as described elsewhere on this page, DPRK has no Western-style CFC attribution regime, though Article 9 does require a DPRK-registered foreign-invested enterprise to pay enterprise income tax on income earned through its branches, agencies, representatives, or subsidiaries established outside DPRK territory, a worldwide-income clause distinct in mechanism from a conventional anti-hybrid rule.
No domestic FBAR-equivalent regime requires DPRK residents to separately disclose foreign financial accounts, and North Korea is not a CRS participating jurisdiction, consistent with its exclusion from most international financial cooperation frameworks under extensive sanctions regimes. US persons remain independently subject to FinCEN Form 114 (FBAR) and potentially Form 8938 regardless of North Korea's own rules, and should independently confirm any US sanctions restrictions on DPRK-related financial dealings before relying on this page for a specific transaction.
A dedicated participation exemption regime for dividends or capital gains from a qualifying subsidiary was not found in the DPRK Law on Foreign Investment or the related Law on Foreign-Invested Business and Foreign Individual Tax, both reviewed directly via WIPO Lex; other DPRK-source income including dividends is instead taxed at the 20%/10% rate described elsewhere on this page rather than through a distinct exemption mechanism.
A dedicated general unilateral foreign tax credit mechanism is not found in the primary statutory text reviewed. North Korea's narrow treaty network, described elsewhere on this page as including double tax agreements with Russia and Indonesia, would provide the primary mechanism for relief from double taxation on income connecting North Korea to those two specific partners; given North Korea's extensive international isolation and sanctions status, relief outside these relationships should not be assumed available and should be confirmed directly with a specialist in DPRK-related sanctions and tax matters.
North Korea's treaty network is narrow but not empty. Russia has a double tax agreement in force with the DPRK (North Korea). Separately, North Korea has a comprehensive double tax agreement with Indonesia for the avoidance of double taxation and prevention of fiscal evasion on income taxes. Given North Korea's extensive international isolation and sanctions status, further comprehensive partners beyond these two are unlikely to be numerous, but a full named-partner list was not compiled and should be confirmed directly with a specialist in DPRK-related sanctions and tax matters before relying on it for a specific transaction.