[Taxation in Korea]① Corporate tax overview

Courtesy of Korea Trade-Investment Promotion Agency (KOTRA)
For more information, please visit: www.investkorea.org

Courtesy of KOTRA

Types of corporate tax

A. Corporate tax on income for each business year

A corporation is required to file and pay corporate tax on income for each business year on the income attributable to the corporation every business year. In general, corporate tax refers to corporate tax on income for each business year.

B. Corporate tax on capital gains on land, etc.

When transferring housing (including attached land) prescribed by law, rights to acquire housing, and non-business use land, corporate tax for capital gains from transfer of land, etc. should be additionally paid.

C. Corporate tax on liquidation income

When a corporation dissolves, corporate tax on liquidation income must be paid on the remaining assets of the corporation.

Tax rate

A. Depending on the tax base bracket, a progressive tax rate of 9-24% shall be the corporate tax rate

Courtesy of KOTRA

B. Corporate tax rate for capital gains from transfer of land, etc. shall be 10% for registered land (20% for housing), and 40% for unregistered land.

Due dates for filing

• A company must prepare a return of corporate tax base and tax amount and file corporate tax to the competent tax office within three months from the last day of the month to which the last day of each business year belongs, and pay the tax accordingly. The business year of most companies established in Korea runs from January 1 to December 31, and companies whose business year ends at the end of December must file and pay corporate tax on income from the business year by March 31 of the following year.

Documents to be submitted

• When filing corporate tax, the following documents shall be attached to the return of corporate tax base and tax amount. If the documents are not attached, it shall be deemed that corporate tax is not filed.

A. Individual domestic corporations’ financial statement* and statement of tax adjustment calculation.

*Statement of financial position, statement of comprehensive income, statement of appropriation of retained earnings (or statement of disposition of deficit).

B. Other accompanying documents and cash flow chart, quote currency financial statement, won currency financial statement.

Corporate local tax

A company obligated to pay corporate tax shall file and pay corporate local tax to the relevant local authority with corporate income as the tax base. The deadline for filing and payment is four months from the last day of the month to which the last day of each business year belongs, and around 10% of the corporate tax is imposed as corporate local tax (refer to the Local Tax Act).

*Corporate local income tax rate: Tax base for corporate tax × 0.9/1.9/2.1/2.4%