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AGN Tax Cards Korea 2011

TAX CARDS 
General Guide to Asia Pacific Countries Tax Facts. 

 

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Korea

1. Basis of Taxation

  • 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.

  • 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

  • National Tax Rate

    Taxable Income

    Tax rate (%)

    Under 200 million won

    10%

    Over 200 million won

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

  • Tax incentives

    Under the Restriction of Preferential Taxation Act, tax incentive systems are provided such as tax deferrals, credits and exemptions.

     With respect to foreign investment, the corporate tax is reduced or exempted under Chapter 5 (§121-2 through §121-7) of the Restriction of Preferential Taxation Act for the following businesses.

    1)    A business of industry-supporting service which is vital to the strengthening of international competitiveness of domestic industries, and a business accompanying high-level technology.
    2)    A business carried on by foreign-invested enterprise which moves in a foreign investment zone.
    3)   Manufacturing business or distribution business operated by an enterprise moving in the Free Trade Zone.
    4)   Distribution-related business carried on by an enterprise moving in the Free Customs Zone.

    • 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

  • 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

  • Local tax rate
    10% of National income tax amount

  • Tax incentives:
    Under the Restriction of Preferential Taxation Act, tax incentive systems are provided such as tax deferrals, credits and exemptions.

    • 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 2.3%~3.5% of the value acquired.
    Registration tax is 0.2~0.8% of the value acquired.
    Property tax is 0.2~4% of the current standard value..
    Comprehensive Real Estate Holding Tax : 0.5%~2%

    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: 0.2 - 4% of the current standard value
    Building: 0.5 - 4% of the current standard value
    House: 0.1 - 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
    Arab Emirates
    Australia
    Austria
    Azerbaijan
    Bangladesh
    Belarus
    Belgium
    Brazil
    Bulgaria
    Canada
    Chile
    China
    Croatia
    Czech Republic
    Denmark
    Egypt
    Estonia
    Fiji
    Finland
    France
    Germany
    Greece
    Hungary
    Iceland
    India
    Indonesia
    Iran
    Ireland
    Israel
    Italy
    Japan
    Jordan
    Kazakhstan
    Kuwait
    Laos
    Latvia
    Lithuania
    Luxemburg
    Malaysia
    Mexico
    Malta
    Ministers of Ukraine
    Mongolia
    Morocco
    Myanmar
    Nepal
    Netherland
    New Zealand
    Norway
    Oman
    Pakistan
    Papua New Guinea
    Philippines
    Poland
    Portugal
    Qatar
    Rumania
    Russia
    Saudi Arabia
    Singapore
    Slovakia
    Slovenia
    South Africa
    Spain
    Sri Lanka
    Sweden
    Switzerland
    Thailand
    Tunisia
    Turkey
    Ukraine
    United Kingdom
    United States
    Uzbekistan
    Venezuela
    Vietnam

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

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

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

    Updated: Aug 2011

    AGN Tax Cards Korea 2011

    Firm: Seoil & Company
    Website: www.seoilacc.co.kr

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

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