Japan vs South Korea taxes (2026): income, shares and inheritance

Japan vs South Korea tax rates at a glance

Tax	🇯🇵 Japan	🇰🇷 South Korea
Income tax	National income tax: 5% - 45% Highest bracket tax: 45% Inhabitant tax: 4% + 6% Reconstruction surtax: 2.1% of income tax Non-resident salary: 20.42% Employment-income deduction: ¥650,000 minimum Individual enterprise tax: 3% - 5% Very-high-income additional rule: 22.5% comparison rate	Up to KRW 14 million: 6% KRW 14m - 50m: 15% KRW 50m - 88m: 24% KRW 88m - 150m: 35% KRW 150m - 300m: 38% KRW 300m - 500m: 40% KRW 500m - 1bn: 42% Above KRW 1bn: 45% Local income tax: 10% of national tax Qualifying foreign-worker flat tax: 19% national
Corporate tax	Standard national corporation tax: 23.2% Qualifying SME first ¥8 million: 15% Certain high-income SMEs first ¥8 million: 17% Large-company effective rate: 30.64% Qualifying SME effective bands: 21.94% / 23.73% / 34.43% Pillar Two minimum: 15%	Up to KRW 200 million: 10% KRW 200m - 20bn: 20% KRW 20bn - 300bn: 22% Above KRW 300bn: 25% Local corporate income tax: 10% of national tax VAT: 10% Pillar Two minimum: 15%
Capital gains tax	Listed securities: 20.315% Long-term land and buildings: 20.315% Short-term land and buildings: 39.63% Cryptoassets: Progressive income rates Main-home special deduction: Up to ¥30 million	Major-shareholder shares up to KRW 300m: 20% national Major-shareholder shares above KRW 300m: 25% national Certain major-shareholder shares held under one year: 30% national Other private-company shares: 20% national Qualifying SME shares: 10% national Unregistered assets: 70% national Securities transaction tax: 0.05% - 0.35% Virtual-asset gains from 2027: 20% national
Dividend tax	Listed shares below 3%: 20.315% Unlisted shares: 20.42% Listed shares at or above 3%: 20.42% National portion on listed shares: 15.315% Local portion on listed shares: 5% NISA dividends: 0%	Ordinary resident dividend: 15.4% National withholding: 14% Local income tax: 1.4% Financial income above KRW 20m: 6% - 45% national Non-resident domestic dividend: 20% national
Wealth tax	Personal net wealth tax: 0% Fixed asset tax: 1.4% City planning tax: Up to 0.3% Business-office tax: ¥600 / m² + 0.25% payroll	Personal net wealth tax: 0% Housing property tax: 0.1% - 0.4% Buildings: 0.25% - 0.5% General-aggregate land: 0.2% - 0.5% Comprehensive real-estate tax on homes: 0.5% - 3.2% Standard real-estate acquisition tax: 4% Building VAT on acquisition: 10%
Inheritance / estate tax	Inheritance tax range: 10% - 55% Basic exemption: ¥30m + ¥6m × statutory heirs Statutory share up to ¥10m: 10% Statutory share ¥100m - ¥200m: 40% Statutory share ¥300m - ¥600m: 50% Statutory share above ¥600m: 55% Spouse credit: ¥160m or legal share Annual gift exemption: ¥1.1 million	Inheritance-tax range: 10% - 50% Up to KRW 100m: 10% KRW 100m - 500m: 20% KRW 500m - 1bn: 30% KRW 1bn - 3bn: 40% Above KRW 3bn: 50% Basic deduction: KRW 200m Lump-sum deduction: KRW 500m Gift-tax range: 10% - 50%
VAT / GST / sales tax	Consumption tax: 10% / 8%	VAT: 10%
Other key taxes	Special reconstruction surtax: 2.1% of income tax Inhabitant tax: About 10%	None listed on country overview

Who wins on each tax

Personal income taxTie

Both national systems reach 45%, with Japan's inhabitant tax and South Korea's local income tax increasing the burden.

Corporate taxSouth Korea

South Korea's national rate starts at 10%, compared with Japan's 15% reduced rate for qualifying small-company income.

Capital gains taxSouth Korea

Japan commonly taxes listed-security gains at 20.315%, real estate at 20.315% after long-term ownership or 39.63% after short-term ownership, and crypto as progressive miscellaneous income; South Korea generally exempts ordinary small shareholders on qualifying on-market listed-share sales, but major-shareholder and private-share gains commonly face 20% or 25% national tax plus local tax.

Dividend taxSouth Korea

South Korea commonly withholds 14% national plus 1.4% local tax on dividends, although residents can enter progressive taxation once combined interest and dividend income exceeds KRW 20 million; Japan commonly withholds 20.315% on listed-share dividends.

Inheritance taxTie

Both systems can reach high top rates, at 55% in Japan and 50% in South Korea.

The verdict

Japan and South Korea are both high-compliance Asian tax residences, with worldwide-income considerations and substantial inheritance-tax exposure.

South Korea's income scale starts lower but reaches 45% plus local tax; Japan's 45% national rate is also layered with inhabitant tax.

For investors, the treatment of shareholdings and the taxpayer's status matters more than headline income brackets.

How to read this comparison

Japan and South Korea are close economic rivals, but their tax outcomes depend heavily on how income and shareholdings are classified.

Frequently asked questions

Is Japan or South Korea lower tax?

There is no universal winner. Both have high marginal income-tax systems, while investment-income and corporate outcomes depend closely on the asset, shareholder status and entity facts.