South Korean Budget Aims For Tax 'Fairness'

by Mary Swire, Tax-News.com, Hong Kong

07 December 2017

South Korea's highest-earning companies will see their tax rate rise from 22 percent to 25 percent next year, as part of President Moon Jae-In's commitment to reduce inequality.

The increase, which also raises the ceiling of the current top corporate rate, will apply to companies with an annual turnover of more than KRW300bn (USD274.5m).

The top rate of individual income tax will also increase to 42 percent from 40 percent for those earning above KRW500m (USD457,658), and a new threshold with a 40 percent rate will be created below that, for income above KRW300m, according to plans in the 2017 Tax Revision Bill, originally presented to parliament on September 1.

The revisions are the result of a pledge by South Korea's President, Moon Jae-in, to hike taxes on the large conglomerates, or chaebols, that dominate Korea's economy, following his election in May 2017. It was announced in July that Moon would seek to reverse "unfair" policies introduced by the previous, ousted president, Park Geun-hye.

TAGS: tax | business | interest | withholding tax | Korea, South | individual income tax | Tax

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