Tax system in South Korea
South Korea generally taxes residents on worldwide income and non-residents on Korean-source income. Residence is fact-sensitive and is usually connected to a Korean domicile or at least 183 days of residence; from 2026, a continuous 183-day period across two tax years can also matter.
Individual income tax uses national progressive rates from 6% to 45%. Local income tax is generally 10% of the national income-tax amount, so the top ordinary combined marginal rate can reach 49.5% before deductions, credits and social insurance.
Domestic corporations are subject to national corporate income tax on taxable business income, with 2026 rates of 10%, 20%, 22% and 25% by tax base. Local corporate income tax is generally 10% of the national corporate-tax amount, and large multinational groups can also face Pillar Two top-up tax.
South Korea taxes investment income through several regimes rather than one universal capital-gains rate. Listed-share sales, private shares, real estate, derivatives, foreign securities and virtual assets have different rules, thresholds and filing dates.
Ordinary interest and dividend income is commonly withheld at 14% nationally, with 1.4% local income tax added. When a resident's combined interest and dividend income exceeds KRW 20 million, it is generally brought into global income taxation at progressive rates.
There is no broad annual personal net-wealth tax on cash, shares or crypto, but property owners can pay local property tax, comprehensive real-estate holding tax, acquisition tax, registration tax and transfer income tax. VAT is generally 10%, and payroll also carries pension, health, employment-insurance and other employment costs.
Tax rates at a glance
- National individual income tax
- 6% - 45%Progressive
- Local individual income tax
- 10% of national tax
- Corporate income tax
- 10% - 25%
- Ordinary dividend withholding
- 15.4%
- Inheritance tax
- 10% - 50%
- VAT
- 10%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
EmployeesFoundersInvestorsProperty ownersCross-border families
Watch out for
- The 6% to 45% personal table is a national tax table on taxable income, not an all-in rate. Local income tax, payroll contributions, deductions, credits, residence status and source rules change the result.
- A foreign worker who first provides services in Korea by December 31, 2026 may elect a 19% flat national tax on qualifying employment income for up to 20 years, but generally gives up income deductions, exemptions and credits. The August 2026 tax-revision bill proposes 21% for future periods; that proposal is not the current rule.
- The 2026 corporate rates are national rates only. Local corporate income tax, local surtaxes, payroll, VAT compliance, withholding, transfer pricing and the global minimum tax can materially change the company-level result.
- South Korea's property system is unusually fact-sensitive. The number and use of homes, officially assessed values, adjustment areas, holding period, occupancy and current reliefs can change acquisition, holding and transfer taxes.
- South Korea's planned individual virtual-asset regime starts on January 1, 2027 under the current law. That does not mean every 2026 crypto activity is tax-free: business income, staking, mining, employment and other income classifications can still matter.
- The Ministry of Finance and Economy published a 2026 tax-revision bill with proposed changes to property, inheritance, dividend, foreign-worker and other rules. Proposed measures should not be treated as enacted until the legislation is passed.
Frequently asked questions
Is South Korea a high-tax country?
Generally yes. South Korea combines progressive national and local income tax, mandatory social-insurance costs, 10% VAT, corporate tax, property taxes, financial-income aggregation and inheritance tax up to 50%.
What is the highest income-tax rate in South Korea?
The highest national individual income-tax rate is 45% above KRW 1 billion of taxable income. Local income tax is generally 10% of the national amount, producing a top ordinary combined rate of 49.5% before other items.
Does South Korea tax worldwide income?
A Korean tax resident is generally taxed on worldwide income, while a non-resident is generally taxed on Korean-source income. Certain foreign residents with five years or less of Korean residence during the prior ten years can have a narrower remittance-based rule for foreign-source income.