Consumption taxes

Nature of the tax

Value Added Tax (VAT)

Tax rate

10%

Reduced tax rate

A 0% rate apply for exports.

Other consumption taxes

Special Excise Tax, Liquor, Tobacco Tax, Stamp, Energy, Environment, Transportation, Auto Tax, etc.

Corporate taxes

Tax rate

Tax rate for foreign companies

Taxation is based on the annual business income. Since most of the foreign investors are corporations and thus liable to pay it, corporate tax makes up the largest portion of the total taxes related to foreign investment. Under the tax agreement, only the income from the permanent establishment of a foreign company is taxable. Permanent establishments here refer to branches, warehouses, stores, or other establishments for installment or construction projects. A company which has a right to sign a contract or which conducts its business and trade through an agent who on behalf of the company buys or sells its stocks is also subject to tax. More information on Invest Korea website.

Capital gains taxation

The capital gains tax applies to the income coming from the transfer of certain assets by an individual in a given year. A corporation is not subject to capital gains tax, and is instead taxed on income generated from this transfer in a form of corporate tax.

Main allowable deductions and tax credit

Tax deduction or exemption for farming cooperatives, fisheries cooperatives, forestry development income, small start-up businesses, start-up companies, foreign investment, disaster loss, Investment, R&D, etc. Consult Invest Korea website.

Other corporate taxes

Urban Planning Tax, Business Place Tax, Community Facility Tax, Local Education Tax, etc.

Individual taxes

Tax rate

Allowable deductions and tax credit

For information on tax for deductions for individuals in Korea access the Summary of Asia Trade Hub.

Special expatriate tax regime

Expatriate have a special tax regime. It concerns especially National pension.

Double taxation treaties

Countries with whom a double taxation treaty have been signed

See the list of Korea's International Tax Treaty

Withholding taxes

Dividends: 20% ; Interest: 20% ; Royalties: 20%

Bilateral agreement

South Korea and Tunisia are bound by a double taxation treaty: yes

Sources of fiscal information

Tax Authorities

National Tax Service

Other domestic resources

Fiscal guide from Seoul City