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Retained

  • Statutory Tax Rate 25
  • Surtax Based on Taxable Income 0
  • Surtax Based on Statutory Tax 10
  • Surtax Deductible from Taxable Income 0
  • Statutory Tax Deductable 0
  • Effective Tax Rate 27.5

Statutory Tax Rate

The current corporation tax rates are as follows: 10% on taxable income up to KRW 200 million; 20% on taxable income between KRW 200 million and KRW 20 billion; 22% on taxable income between KRW 20 billion and KRW 300 billion; and 25% on taxable income exceeding KRW 300 billion. The 25% top rate is introduced from 2018.

A minimum tax is payable as follows if resulting in a greater tax liability than the standard rates before certain tax deductions and credits: 10% on taxable income up to KRW 10 billion; 12% on taxable income up to KRW 100 billion; and 17% on taxable income over KRW 100 billion. For SMEs the rate is 7%.

Inhabitant tax is a local tax imposed on two tax bases: a tax imposed on corporation tax liability; and a per capita tax on corporations with offices in a city or county in Korea. The local tax on the corporate tax liability is 10%, and the per capita tax ranges from KRW 50,000 to 500,000 depending on the size of the corporation's capital and the number of employees.

As part of the income circulation policies introduced from 1 January 2015, companies precluded from mutual investment or with equity equal to or more than KRW 50 billion are subject to an accumulated earnings tax of 10% (11% with local tax). In general, companies may choose to calculate the tax base as 80% of adjusted taxable income less investments, wage increases, dividend payments, and certain other items; or 30% of adjusted taxable income without the deduction for investments.

From 2018, the accumulated earnings tax rate is increased to 20% (22% with local tax) and the calculation method is adjusted.

Surtax Based on Statutory Tax

Inhabitants tax 10%. A 10% inhabitants tax is imposed on the tax liability, i.e. 10% of the 22% corporate income tax, resulting in 2.2% rate.