TAX CARDS 
General Guide to Asia Pacific Countries Tax Facts.
KOREA 2010
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1. Basis of Taxation

  1. Individual Income Tax
    Resident individuals are taxed on their worldwide income
    Non-resident individuals are taxed only on Korean-source income.
    Individual income is taxed on a calendar year basis and filed during May of the following year.

  2. Corporate Income Tax
    A corporation with its head office in Korea is liable to corporation tax on its worldwide income.
    A corporation with its head office located in a foreign country is liable to corporate tax on its income only from a domestic source.
    Domestic or foreign corporations can determine their fiscal year by reporting it to their regional tax office., When they fails to report, their fiscal year shall be January 1st to December 31st each year.
    Corporate income is taxed on the fiscal year basis and filed within three months from the end of fiscal year.

2. Corporate Tax

  1. National Tax Rate

    Taxable Income

    Tax rate (%)

    Under 200 million won

    10%

    Over 200 million won

    22 million won + 22% of the amount exceeding 200 million won

  2. Local tax rate
    10% of National income tax amount

  3. Tax incentives
    Under the Special tax treatment control law, tax incentive systems are provided such as tax deferrals, credits and exemptions.
    And corporate tax incentives for foreign direct investments are “full exemption for 5 years, 50% reduction for following 2 years”. 

3. Withholding tax rate (non-treaty)

 

Resident/Non-resident(with fixed business base)

Non-resident (without  fixed business base)

Dividends

14%

20%

Interest

14%

20%

Business income

3%

2%

Royalties/know-how

3%

20%

Rents (for moveable property)

3%

2%

Management fees

20%

20%

Technical fees

20%

20%

Directors’fees

20%

20%

* Residents are liable to tax on incomes aggregated and taxed progressively.

4. Residential individual tax rates

  1. National Tax Rate

    Taxable income

    Tax rates

    Under 12 million won

    6%

    12 million - 46  million won

    0.72 million won + 15% of the amount exceeding 12 million won

    46  million – 88  million won

    5.82 million won + 24% of the amount exceeding 46 million won

    Over 88 million won

    15.90 million won + 35% of the amount exceeding 88 million won

  2. Local tax rate
    10% of National income tax amount

  3. Tax incentives
    Under the ‘Special tax treatment control law’, tax incentive systems are provided such as tax deferrals, credits and exemptions.
    Individual tax incentives for foreign direct investments are granted full exemption for 5 years, thereafter 50% reduction in the following 2 years. 

5. Non-residential individual tax rates
Non-residents with fixed business base are taxed on the same basis with residents (taxed on incomes aggregated and taxed progressively).
Non-residents without fixed business base are taxed only on withholding basis (not aggregated nor progressively).
Residents and non-residents are taxed on their wages and salaries on the same basis.

6. Goods and Services Tax
Value added tax is levied on the supply of goods or services and the tax rate is 10%.

7. Estate duty
Acquisition tax is 2% of the value acquired.
Registration tax is 2% of the value acquired.
Property tax is 0.2-0.5 % of the current standard value.

8. Stamp duty
Stamp tax is levied on a person who prepares a document certifying establishment, transfer or change of property rights.

Taxable document

Mentioned amount

Tax amount

Contract of transfer concerning real estate, vessel, aircraft or business

Over 10 million won and under 30 million won
Over 30 million won and under 50 million won
Over 50 million won and under 100 million won
Over 100 million won and under 1 billion won
Over 1 billion won

20,000 won
40,000 won
70,000 won
150,000 won
350,000 won

Contract of financial services

Contract of construction or commission

Others

N/A

100 – 10,000 won

9. Property tax
Land: 0.07 – 4% of the current standard value
Building: 0.25 – 4% of the current standard value
House: 0.1 – 0.4% of the current standard value
Vessel: 0.3 – 5% of the current standard value
Aircraft: 0.3% of the current standard value

10. Income tax filing deadlines

Types of Form

 

Deadlines

Individual income  tax

Residential individual

The end of May in following year

Non-residential individual

Same with above

Corporate income  tax

Companies

Within three month after the end of reported fiscal year

Individual income  tax

Partnerships

The end of May in following year

11. Double Tax Agreements.

Country

Dividend %

Interest %

Royalties %

Albania
Algeria
Australia
Austria
Azerbaijan
Bangladesh
Belgium
Brazil
Bulgaria
Canada
China
Croatia
Czech Republic
Denmark
Egypt
Fiji
Finland
France
Germany
Greece
Hungary
Iceland
India
Indonesia
Iran
Ireland
Israel
Italy
Japan
Kuwait
Laos
Latvia
Malaysia
Mexico
Malta
Mongolia
Morocco
Netherland
New Zealand
Norway
Oman
Pakistan
Papua New Guinea
Philippines
Poland
Portugal
Qatar
Rumania
Russia
Saudi Arabia
Singapore
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland
Thailand
Tunisia
Turkey
United Kingdom
United States
Uzbekistan
Venezuela
Vietnam

5, 10
5, 15
15
10, 15
7
10, 15
15
15
5, 10
5 ,15
5, 10
5,10
5, 10
15
10, 15
10, 15
10, 15
10, 15
10, 15
5, 15
5, 10
5, 10
15, 20
10, 15
10
10, 15
5, 10
10, 15
5, 15
10
5, 10
5, 10
10, 15
0, 15
5, 15
5
5, 12
10, 15
15
15
5, 10
10,12.5
15
10, 25
5, 10
10, 15
10
7, 10
5, 10
5, 10
10, 15
5, 15
5, 15
10, 15
10, 15
10, 15
10, 15
10
15
15, 20
5, 15
10, 15
10, 15
5,10
10

10
10
15
10
10
10
10
10, 15
10
10
10
5
10
15
10, 15
10
10
10
10, 15
8
0
10
10, 15
10
10
0
7.5, 10
0
10
10
10
10
10
5, 10, 15
10
5
10
10, 15
10
15
5
12.5
10
10, 15
10
15
10
10
0
5
10
5
10
10
10
10, 15
10
10, 15
12
10, 15
10
12
5
5,10
10

10
2, 10
15
10
5,10
10
10
15, 25
5
10
10
0
10
10, 15
15
10
10
10
15, 15
10
0
10
15
15
10
0
2.5
10
10
15
15
5, 10
10, 15
10
0
10
5,10
10,15
10
15, 15
8
10
10
15
10
10
5
7, 10
5
5, 10
15
5
10
10
10
10, 15
10
5,10,15
15
10
2, 10
15, 15
2.5
5,10
5, 15

 

Firm: SEOIL & COMPANY LLP
Website: www.seoilacc.co.kr

Contact person: Mr Mr Jin-Hyuk Joo
E-mail: korea@seoilacc.co.kr          

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