A tax is imposed on net taxable income in Korea by the district tax office, and cities (or “gu” for large cities). In Korea, a tax payable to the district tax office is called “income” tax (소득세). A tax payable to cities is called “resident” tax (지방세). For most of cases, 10% resident tax will be levied additionally to the income tax.
There are four tax brackets for corporate taxable income in Korea: 10%, 20%, 22% and 25%. The calculation itself is not complicated, as long as the net taxable income amount is accurate.
2018-2020 Corporate Income Tax Rates in Korea
Example of a Tax Computation
Income tax for year 2019:
- Company in Seoul, Korea had net taxable income of W500,000,000 for FY2019.
- No loss carry-forwarded from previous years.
- No tax exemptions/credits applicable.
- Total income tax is W80,000,000 (W500,000,000 x 20% – W20,000,000).
- Resident tax is approx. W8,000,000.