Memorandum of Understanding 

In connection with the Agreement between the Government of the United States of America and 

the Government of the Republic of Korea to Improve International Tax Compliance (hereafter 

referred to as "the Agreement"), signed at Seoul on June 10,2015, the United States Department 

of the Treasury and the Republic of Korea ("ROK") Ministry of Strategy and Finance wish to 

confirm their respective governments' understanding of the following: 

In r~ference to Article I of the Agreement (Dejinitiono) 

I. It is understood that paragraph 7 of Article 4 of the Agreement applies to all the definitions in 

Article I of the Agreement, including, for example, the definitions of Preexisting Account 

and of Financial Account. Accordingly, the following interpretations are understood: 

a. Consistent with applicable U.S. Treasury Regulations, the ROK Ministry of Strategy 

and Finance may interpret the term "Depository Account," as that term is defined in 

the Agreement, as not including negotiable debt instruments that are traded on a 

regulated market or over-the-counter market and distributed and held through 

Financial Institutions. 

b. Consistent with applicable U.S. Treasury Regulations, the ROK Ministry of Strategy 

and Finance may interpret "Cash Value," as that term is defined in the Agreement, as 

not including an amount payable under a Life Insurance Contract solely by reason of 

the death of an individual insured; or as not including a return of an advance premium or 

premium deposit for an Insurance Contract for which the premium is payable at least 

annually if the amount of the advance premium or premium deposit does not exceed the 

next annual premium payable under the contract. 

c. Consistent with applicable U.S. Treasury Regulations, the ROK Ministry of Strategy 

and Finance may interpret an "Investment Entity," as that term is defined in the 

Agreement, such that an entity would not be treated as an Investment Entity ifless 

than 50% of its gross income is attributable to investing, reinvesting, or trading in 

financial assets, and provided that it would not otherwise meet any of the other 

requirements to be treated as an Investment Entity. 

d. Consistent with applicable U.S. Treasury Regulations, the ROK Ministry of Strategy 

and Finance may interpret "Preexisting Account" as that term is defined in the 

Agreement to include other Financial Accounts that are part of a consolidated 

obligation, regardless of the date such accounts are entered into, provided that the 

accounts would be treated as preexisting obligations under relevant U.S. Treasury 

Regulations. 
e. Consistent with applicable U.S. Treasury Regulations, the ROK Ministry of Strategy 

and Finance may apply the aggregation of Financial Accounts rules as set forth in 

relevant U.S. Treasury Regulations to determine the balance or value of such 

Financial Accounts. 

2. It is understood that a "Financial Institution," as that term is used in the Agreement, does not 

include ROK credit card issuers that (i) do not accept deposits when a customer makes a 

payment in excess of a balance due with respect to their card because the credit card issuer's 

payment system does not permit overpayments to be made by customers; and (ii) do not 

maintain any other Financial Accounts. 

In reference to Subparagraph 2(a)(3) o.fArtic/e 2 qfthe Agreement 

It is understood that the ROK Ministry of Strategy and Finance intends for each Korean 

Financial Institution to use a Global Intermediary Identification Number ("GIIN") issued by the 

Internal Revenue Service as the identifying number referenced in Subparagraph 2(a)(3) of 

Article 2 of the Agreement. 

In reference to Subparagraph I (c) ofArtic/e 4 qf the Agreement 

It is understood that the ROK Ministry of Strategy and Finance intends for Korean Financial 

Institutions to comply with the registration requirements applicable to Financial Institutions in 

Partner Jurisdictions by registering with the Internal Revenue Service and obtaining a GllN from 

the Internal Revenue Service. 

Signed in duplicate in the English and Korean languages. 

For United States Department of the 

Treasury: 

/l~--ff.~~--

Date. _ _."CJ_:_-:-'-;;'-/,-.-r/-'-/,-:::-;------ l'lace_(~-'Au.cLJ'1'"'.r-'-/Jc__=.o_....c~~=--------

2 

For the Republic of Korea Ministry of 

Strategy and Finance: 

;?/ 

'Q 

Date_-----'-'-U-_,_ . .;c.-2---'f:?---7-- 1 _'2_0_16 __ _ Place. ___ <?-.LJ:ea'-DLJlAL'.LI ______ _