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Taxation in Korea 2022

Updated: Sep 5, 2023


Taxation

Taxes in Korea are divided into national taxes imposed and collected by the central government and local taxes imposed and collected by local governments.


Among these, national taxes are divided into domestic taxes and customs duties. Among the various types of taxes, the types most commonly encountered by business operators in Korea, including foreign-invested companies, are corporate tax (corporate), income tax (individual), and value-added tax. This is because business taxpayers must file a quarterly value-added tax (VAT) return and corporate tax or income tax on annual income.


These three tax items also constitute the largest tax revenue, accounting for about 80% of all of the central government’s tax revenues.In this regard, this book focuses on the three taxes that are most commonly encountered by foreign-invested companies in Korea, namely corporate tax, income tax, and value-added tax, as well as the following tax items that are paid when establishing a corporation, transferring stocks, and acquiring and holding business assets (building, land, etc.).


(1) National Tax

① Corporate tax: Tax levied on corporate income

② Income tax: Tax levied on an individual's income

③ Value-added tax (VAT): Tax levied on the supply of goods or services and import of goods

④ Securities transaction tax: Tax levied at a certain percentage of the stock transfer price

⑤ Comprehensive real estate tax: Tax imposed when the total amount of housing and land exceeds a certain amount


(2) Local tax

① Corporate local income tax: Tax imposed on corporate income

② Registration and license tax: Tax imposed on corporate establishment and capital

③ Acquisition tax: Tax levied on the acquisition of certain assets such as real estate

④ Property tax: Tax levied on the owner of property such as real estate




 

*This article is extracted from Investment Guides from Invest Korea, February 2022. #TaxationInKorea #NationalTax #LocalTax #TaxationHelp #TaxationInformation


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