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COUNTRY TRADING PROFILES
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Taxes - Accounting
Tax Rates |
Accounting Rules
Tax Rates
Consumption taxes
- Nature of the tax
-
Value Added Tax (VAT)
- Tax rate
- 10%
- Reduced tax rate
- A 0% rate apply for exports.
- Other consumption taxes
- Special Excise Tax, Liquor, Tobacco Tax, Stamp, Energy, Environment, Transportation, Auto Tax, etc.
Corporate taxes
Tax rate
| Corporate tax |
11% (up to KRW 200 million)
22% (from KRW 200 million to KRW 20 billion)
24.2% (Over KRW 20 billion) |
| 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.
- 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.
Individual taxes
Tax rate
| Up to KRW 12 million |
7% |
| From KRW 12 to 46 million |
16% |
| From KRW 46 to 88 million |
25% |
| Over KRW 88 million |
34% |
- Allowable deductions and tax credit
- For information on tax for deductions for individuals in Korea access the Summary of Asia Trade Hub.
- Special expatriate tax regime
- Expatriate have a special tax regime. It concerns especially National pension.
 We can indicate you which local taxes are applied to your product.
Accounting Rules
- Tax year
- From January 1st to December 31st.
- Accounting standards
- Statement of Korea Accounting Standards.
- Accounting regulation bodies
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FSS
KAI
- Accounting reports
- Accounting structures includes Balance sheet, income statement, statement of cash flows, explanatory notes.
- Publication requirements
- 1) Companies listed at the stock-exchange and KOSDAQ market have to follow the disclosure regulation:
- Periodic disclosure : the business reports after the end of a fiscal year, semi-annual reports, and quarterly reports.
- 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 issuing 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
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KICPA
KACPTA
- Certification and auditing
- Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact an external auditor: Ernst and Young Global, Deloitte Touche Tohmasu, KPMG International, Price Waterhouse Coopers.
- Accounting news
-
Korea Accounting Institute
© Export Entreprises SA, all rights reserved.
Last updates: May 2012
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