On 29 July 2008, the National Assembly approved the introduction of a simplified tax regime in the Corporate Tax Act. The simplified regime is to take effect from 1 January 2008. Under this regime, companies will be able to enjoy special tax credits and be exempt from tax investigations provided the following requirements are met:
|-||the company's net revenue should not be more than KRW 5 million;|
|-||the company performs double-entry bookkeeping; and|
|-||the company's transactions are transparent.|
Under the simplified tax regime, the following benefits are available for companies that meet the above requirements:
|-||a simplified method of deducting depreciation (straight-line method);|
|-||limited deductions for entertainment expense; and|
|-||limited deductions (i.e. 0.5% of total sales) for charitable contributions.|
The newly inserted Corporate Tax Act provisions are Chapter 2-2, Article 76-2, Article 76-3 and Article 76-4.
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