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Tax rates

Consumption taxes

Nature of the tax: Value Added Tax (VAT)
Tax rate: 10%
Reduced tax rate: A 0% rate regarding exports.
Other consumption taxes: Special Excise Tax, Liquor, Tobacco Tax, Stamp, Energy, Environment, Transportation, Auto Tax, etc.

Corporate taxes

Tax rate

Corporate tax	10% (up to KRW 200 million) 20% (More than KRW 200 million)
Resident surtax	10% of the corporate income tax liability

Tax rate for foreign companies: Taxation is based on the annual business income. Since most of the foreign investors are corporations and thus liable to pay it, corporate tax makes up the largest portion of the total taxes related to foreign investment. Under the tax agreement, only the income from the permanent establishment of a foreign company is taxable. Permanent establishments here refer to branches, warehouses, stores, or other establishments for installment or construction projects. A company which has a right to sign a contract or which conducts its business and trade through an agent who on behalf of the company buys or sells its stocks is also subject to tax. More information on Invest Korea website.
Capital gains taxation: The capital gains tax applies to the income coming from the transfer of certain assets by an individual in a given year. A corporation is not subject to capital gains tax, and is instead taxed on income generated from this transfer in a form of corporate tax. More information on Global Seoul website.
Main allowable deductions and tax credit: Tax deduction or exemption for farming cooperatives, fisheries cooperatives, forestry development income, small start-up businesses, start-up companies, foreign investment, disaster loss, Investment, R&D, etc. Consult Invest Korea website.
Other corporate taxes: Urban Planning Tax, Business Place Tax, Community Facility Tax, Local Education Tax, etc.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of Korea's International Tax Treaty
Withholding taxes: Dividends: 0/27%, Interest: 0/27%, Royalties: 0/27.5%
Bilateral agreement

We can indicate you which local taxes are applied to your product.

Sources of fiscal information

Tax Authorities: National Tax Service
Other domestic resources: Seoul City

Accounting rules

Tax year

From January 1st to December 31st.

Accounting standards

Statement of Korea Accounting Standards.

Accounting regulation bodies

FSS
KAI

Accounting reports

Balance sheet, income statement, statement of cash flows, explanatory notes.

Publication requirements

1)The companies quoted in the stock-exchange and KOSDAQ market have to follow the disclosure regulation:
- Periodic disclosure : the business reports after the end of a fiscal year, semiannual reports, and quarterly
reports, etc.
- Timely disclosure : major business details as outlined in the Securities Exchange Act and the Disclosure Regulations of the
KRX-Stock Market
- Special disclosure : merger, ·spin-off, reports of business takeover & transfer, reports of acquisition &
disposal of treasury stocks, etc.

2) External Auditing companies are required to disclose Audiiting report.

3)Corporations that issue securities are required to disclose public securities registration statements, business prospectuses, records of securities issuances, etc.
More information on Korea exchange website.

Professional accountancy bodies

KICPA
KACPTA

Certification and auditing

Ernst and Young Global
Deloitte Touche Tohmasu
KPMG International
Price Waterhouse Coopers

Accounting news

Korea Accounting Institute

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