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: 9%, 19%, 21% and 24%. The calculation itself is not complicated, as long as the net taxable income amount is accurate.
Corporate Tax Rates Lowered from 2023 in Korea
| Tax Base (KRW in millions) |
Tax Rate (2018-2022) | Tax Rate (Fr 2023) |
| Up to 200 | 10% | 9% |
| 200 – 20,000 | 20% | 19% |
| 20,000 – 300,000 | 22% | 21% |
| Above 300,000 | 25% | 24% |
*For small to medium-sized companies, 10% CITR is applicable to a tax base up to 500 million Korean won.
Example Tax Computation
Income tax for the tax year 2023:
- Company in Seoul qualified as a small or medium-sized company had a adjusted net taxable income of W500,000,000 for FY2023.
- No loss carry-forwarded from previous years.
- No tax exemptions/credits applicable.
- Total income tax is W50,000,000 (W500,000,000 x 10%).
- Resident tax is approx. W5,000,000.
