South Korea Announces Tax Hike; Business Entities in the Country Affected
The South Korean government has announced changes to its tax laws that would increase tax rates for both large businesses operating in the country and employees.
- (1888PressRelease) September 13, 2012 - Sunnyvale, CA - The new law changes are expected to increase South Korean tax revenues by KRW 1.8 Trillion and raising taxes on capital gains and tax rates.
South Korean Government Tax Changes: Key Highlights
* Raises the highest minimum tax rate to 15% from 14% for corporation with income above KRW 100 million.
* Transaction tax of 0.001% on financial derivatives has also been agreed; however, due to the current market conditions the provision would take effect after 3 years.
* The base for taxation on financial income (consolidated interest and dividend income for taxpayers) would be reduced from KRW 40 million to KRW 30 million.
* The sunset clause which encourages foreign investment and foreign workers has also been extended for 2 more years i.e. for earnings before or on December 31st, 2014. However, under the clause, the flat tax rate on income which includes resident surtax has been increased to 18.7% from 16.5 %.
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