Taxes and Accounting in South Korea
- Tax Year
- From January 1st to December 31st.
- Accounting Standards
- Statement of Korea Accounting Standards.
- Accounting Regulation Bodies
- Accounting Reports
- Accounting structures includes Balance sheet, income statement, statement of cash flows, explanatory notes.
- Publication Requirements
1) Companies listed at the stock-exchange and KOSDAQ market have to follow the disclosure regulation:
- Periodic disclosure : the business reports after the end of a fiscal year, semi-annual reports, and quarterly reports.
- Timely disclosure : major business details as outlined in the Securities Exchange Act and the Disclosure Regulations of the KRX-Stock Market
- Special disclosure : merger, ·spin-off, reports of business takeover & transfer, reports of acquisition & disposal of treasury stocks, etc.
2) External Auditing companies are required to disclose Audiiting report.
3) Corporations issuing securities are required to disclose public securities registration statements, business prospectuses, records of securities issuances, etc.
More information on Korea exchange website.
- Professional Accountancy Bodies
KICPA , Korean Institute of Certified Accountants
KACPTA , Korean Association of Certified Public Tax Accountants (in Korean)
- Certification and Auditing
- Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact an external auditor: Ernst and Young Global, Deloitte Touche Tohmasu, KPMG International, Price Waterhouse Coopers.
- Accounting News
Korea Accounting Institute
- Nature of the Tax
- Value Added Tax (VAT)
- Tax Rate
- 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.
- Company Tax
11% (up to KRW 200 million)
22% (More than KRW 200 million)
- 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.
|Up to KRW 12 million||7%|
|From KRW 12 to 46 million||16%|
|From KRW 46 to 88 million||25%|
|Over KRW 88 million||34%|
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: 0% for domestic companies (20% withholding tax plus the resident surtax for individuals and 20% withholding tax for nonresident companies);
- Interest: 0% for domestic companies. 20% withholding tax plus the resident surtax for individuals and 20% withholding tax for nonresident companies (may be reduced under tax treaties);
- Royalties: 0% for domestic companies. 20% withholding tax plus the resident surtax for individuals and 20% withholding tax for nonresident companies (may be reduced under tax treaties).
- National Organizations
Korea Industrial Property Office (KIPO)
Korea Institute of Patent Information (KIPI)
International Intellectual Property Training Institute (IIPTI)
Korea Copyright Commission
Korea Patent Attorneys Association (KPAA)
- Regional Organizations
- Intellectual Property Rights Experts Group (IPEG)
- International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
National Regulation and International Agreements
|Type of property and law||Validity||International Agreements Signed|
Patent Cooperation Treaty (PCT)
Strasbourg agreement Concerning the International Patent Classification
|10 years renewable every 10 years||
Trademark law treaty
Protocol relating to the Madrid Agreement
|50 years after the death of the author (It will be 70 years from the end of 2009 or 2010)||
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Utility Model Law
- Independence of Justice
- Equal Treatment of Nationals and Foreigners
- The Language of Justice
- Recourse to an Interpreter
- Yes. With the rapid increase of the crime committed by the foreigners, the Korean courts are trying to staff up more necessary interpreters.
- Sources of the Law and Legal Similarities
- The system is modeled on European systems with Anglo-American influences like Japan.
- Checking National Laws Online
Total Korean law service of Supreme Court
Total Korean law service
Ministry of Government Legislation (MOLEG)
Korea Legislation research Institute (KLRI)
Ministry of Finance and Economy (MOFE)
- National Standards Organizations
Korean Agency for Technology and Standards (KATS)
- Integration in the International Standards Network
- International Level: The International Standard organization (ISO); The International Electrotechnical Commission (IEC).
- Classification of Standards
- KS consists of 16 categories from General to Information Industry and is divided into three parts. More information available on The Korean standards website.
- Online Consultation of Standards
- Korean Standards Service Network
- Certification Organizations
Korean Standards Association (KSA)
- General Information
Blog of Korean Business Culture
Dong Business in Korea
Soft Landing Korea
- Opening Hours and Days
Public office and lots of private offices are closed on Saturday and Sunday.
Banks: from 9.30 to 16.30, Monday to Friday, from 9.30 to 13.30 on Saturdays.
|New Year's Day||January 1st|
|Lunar New Year's Day||February|
|Independance Movement Day||March 1st|
|Labor Day||May 1st|
|Children's Day||May 5|
|Memorial Day||June 6|
|Constitution Day||July 17|
|Liberation Day||August 15|
|Chuseok (Korean Thanksgiving Day)||September|
|Nation Foundation Day||October 3|
Periods When Companies Usually Close
|Lunar New Year's Day Season||January 1st of Lunar calendar|
|Chuseok (Korean Thanksgiving Day)||August 15 of Lunar calendar|
|Summer vacation season||July or Aug according to companies|
|Winter vacation season||According to companies, between Christmas and New Year's day|
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