Corporate Tax Act (Beopin Sebeop)
The Corporate Tax Act (Beopin Sebeop) governs the taxation of corporations in South Korea. Enacted in 1967, the Act establishes the framework for calculating corporate taxable income, tax rates, and various provisions for depreciation, reserves, and loss carryforwards. South Korea’s corporate tax rate has been reformed, with the current headline rate of 19% (2023) following reductions aimed at enhancing competitiveness.
Legal area: Law governing the assessment and collection of taxes.
Year enacted: 1967
Full text: https://elaw.klri.re.kr/eng_service/law_view.do?hseq=south-korea-corporate-tax-act
Key Provisions
- Part I: General provisions (definition of corporation, taxable period)
- Part II: Taxable income (income, deductions, loss carryforward)
- Part III: Depreciation of assets
- Part IV: Special provisions (consolidated taxation, transfer pricing)
- Part V: Tax credits and incentives
- Part VI: Filing and collection
Significance
The Corporate Tax Act has been reformed to enhance South Korea’s international competitiveness. The headline rate was reduced from 25% to 22% in 2018 and to 19% in 2023. The Act’s provisions on transfer pricing and international taxation have been strengthened to implement OECD BEPS recommendations. The loss carryforward period has been extended to 20 years for small and medium enterprises. The Act plays a significant role in shaping South Korea’s business environment and investment attractiveness.