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Retained

  • Statutory Tax Rate 24
  • 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 26.4

Statutory Tax Rate

For domestic companies, corporate tax is calculated based on progressive rates as shown below. In addition, a local income tax of 10% of corporate income tax liability is also imposed.

Taxable Base (in KRW)

Rate (effective from 1 January 2023)

Local Income Surtax @ 10% on the Corporate Tax Rate

Total

Up to 200 million:

9%

(reduced from 10%)

0.9%

9.9%

Over 200 million – 20,000 million:

19%

(reduced from 20%)

1.9%

20.9%

Over 20,000 million – 30,000 million:

21%

(reduced from 22%)

2.1%

23.1%

Over 30,000 million:

24%

(reduced from 25%)

2.4%

26.4%

Additional Corporate Income Tax

Companies that are members of an enterprise group with restrictions on cross-shareholding are subject to an accumulated earnings tax (additional levy) in addition to the corporate tax. This levy is imposed at a rate of 20% (22% with local tax) on excess earnings.

Companies may choose to calculate the tax base for excess earnings as:

  • 70% of adjusted taxable income less investments, wage increases, and certain other items; or
  • 15% of adjusted taxable income without the deduction for investments.

The accumulated earnings tax is levied until 31 December 2025. Until 31 December 2022, this levy also applied to companies precluded from mutual investment or with equity equal to or more than KRW 50 billion.

Minimum Tax

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%. Medium-scale companies are subject to the minimum tax at the rate of 8% for the first 3 years, starting from the year when the size exceeds an SME for the first time, and at the rate of 9% for the next two years.

Surtax Based on Statutory Tax

Local income tax is imposed at the rate of 10% on the tax liability, i.e., 10% of the 24% corporate income tax (highest rate), resulting in a 26.4% top tax rate.

Effective Tax Rate

For domestic companies, corporate tax is calculated based on progressive rates as shown below. In addition, a local income tax of 10% of corporate income tax liability is also imposed.

Taxable Base (in KRW)

Rate (effective from 1 January 2023)

Local Income Surtax @ 10% on the Corporate Tax Rate

Total

Up to 200 million:

9%

(reduced from 10%)

0.9%

9.9%

Over 200 million – 20,000 million:

19%

(reduced from 20%)

1.9%

20.9%

Over 20,000 million – 30,000 million:

21%

(reduced from 22%)

2.1%

23.1%

Over 30,000 million:

24%

(reduced from 25%)

2.4%

26.4%

Additional Corporate Income Tax

Companies that are members of an enterprise group with restrictions on cross-shareholding are subject to an accumulated earnings tax (additional levy) in addition to the corporate tax. This levy is imposed at a rate of 20% (22% with local tax) on excess earnings.

Companies may choose to calculate the tax base for excess earnings as:

  • 70% of adjusted taxable income less investments, wage increases, and certain other items; or
  • 15% of adjusted taxable income without the deduction for investments.

The accumulated earnings tax is levied until 31 December 2025. Until 31 December 2022, this levy also applied to companies precluded from mutual investment or with equity equal to or more than KRW 50 billion.

Minimum Tax

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%. Medium-scale companies are subject to the minimum tax at the rate of 8% for the first 3 years, starting from the year when the size exceeds an SME for the first time, and at the rate of 9% for the next two years.