Tax
Direct taxation formally abolished; revenue raised by state levies
The DPRK abolished direct taxation on citizens in 1974 and presents itself as a tax-free country. Revenue is raised through state enterprise transfers and, for foreign ventures, a separate foreign-investment tax law.
Key rules
- Jurisdiction — Foreign-invested enterprises in zones are taxed under the separate foreign-investment tax law.
Governing law
- Law on Abolition of the Tax System1974
- Law on Foreign-Invested Business and Foreign Individual Tax
In practice
Published rates for foreign-invested enterprises include a headline enterprise income tax with reductions in preferential zones, plus turnover and local taxes. In practice, the abolition of citizen taxation coexists with extensive non-tax extraction: mandatory contributions, quota deliveries and unpaid mobilised labour are widely reported. No budget of the kind that could be audited is published, so figures cannot be verified. Sanctions restrictions make the foreign-investment provisions largely academic for most investors.