South Korea has imposed a total of $207 million in taxes on five foreign funds including Lone Star and Carlyle Group, thus prompting concern...

South Korea has imposed a total of $207 million in taxes on five foreign funds including Lone Star and Carlyle Group, thus prompting concerns about a possible rise in anti-foreign sentiment. The tax imposition has come after some foreign private equity funds have earned huge profits in South Korea without paying any tax as they have taken advantage of a double-taxation treaty which has caused public outrage. According to the South Korean tax authorities some foreign funds have set up shell companies in tax havens and have conducted business in the country through them, thus avoiding tax. The tax authorities have decided to collect taxes from funds where the recipient of the capital gains is not based in the tax jurisdictions with which South Korea has a double-taxation treaty. "We think some of them [fund managers] can be prosecuted. We are now reviewing legal procedures," Yoon Jong-hoon, the head of Seoul District Tax Office, said at a briefing.