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LPL » Topics » The income tax exemption under the foreign direct investment laws of Korea is no longer available to us.This excerpt taken from the LPL 20-F filed Jun 23, 2009. The income tax exemption under the foreign direct investment laws of Korea is no longer available to us. Philips Electronics’ investment in us upon the formation of the joint venture was characterized as a foreign direct investment under the Foreign Investment Promotion Act of Korea. Accordingly, we were entitled to an exemption from income taxes on income generated from our TFT-LCD business pursuant to the Special Tax Treatment Control Law of Korea in an amount proportional to the percentage of foreign direct equity investment in us for the first seven taxable years following the registration of such investment, which for us was in August 1999, and at one-half of that percentage for the subsequent three taxable years. In 2008, we received a tax benefit of (Won)32.6 billion (US$25.8 million), or 3.0% of income before income taxes, as a result of Philips Electronics’ 14.59% weighted average ownership in us in 2008. 2008 was the last taxable year we were eligible to receive this income tax exemption. The loss of this tax exemption could negatively affect our results of operations.
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