How corporate tax works in South Korea
A domestic corporation, including a company incorporated or headquartered in Korea, is generally taxed on its worldwide business income. A foreign corporation is generally taxed on Korean-source income, with a Korean permanent establishment, place of business, treaty and withholding analysis determining the practical scope.
For business years beginning on or after January 1, 2026, the national corporate-tax schedule for ordinary for-profit corporations is 10% up to KRW 200 million, 20% from KRW 200 million to KRW 20 billion, 22% from KRW 20 billion to KRW 300 billion, and 25% above KRW 300 billion.
Local corporate income tax is generally imposed at 10% of the national corporate-tax amount. Companies can also face local surtaxes, withholding, acquisition and property taxes, employment costs, customs, VAT and industry-specific taxes.
Taxable income starts from accounting profit but is adjusted under the Corporate Tax Act. Deductibility, depreciation, reserves, related-party pricing, thin capitalization, controlled foreign companies, foreign tax credits and tax incentives can change the taxable base.
Corporate tax returns are generally due no later than three months after the last day of the month in which the business year ends. Businesses also make VAT filings and issue electronic tax invoices where required.
South Korea applies OECD Pillar Two rules to qualifying multinational groups with consolidated revenue of at least EUR 750 million in at least two of the previous four years. The income inclusion rule began in 2024, the undertaxed profits rule in 2025 and the qualified domestic minimum top-up tax from 2026.
Tax rates at a glance
- Up to KRW 200 million
- 10%2026
- 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%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersKorean subsidiariesOperating companiesCross-border groupsR&D businesses
Watch out for
- The 10% to 25% schedule is national corporate tax only. Adding local corporate income tax mechanically gives a top headline layer of 27.5%, but the actual effective rate depends on taxable income, local rules, credits and other taxes.
- A foreign company can have Korean tax exposure without a subsidiary through Korean-source income, a permanent establishment, dependent-agent activity, Korean real estate, service activity or withholding obligations.
- Tax incentives for SMEs, strategic industries, R&D, foreign investment zones and regional investment are conditional. A headline statutory rate should not be compared with an incentive rate without checking eligibility and clawback rules.
- Intercompany charges, guarantees, financing and royalty arrangements need transfer-pricing and international-tax support. Korean tax authorities can adjust related-party pricing and restrict interest deductions.
- Pillar Two is not a flat 15% corporate-tax rate for every Korean company. It is a jurisdictional top-up system for in-scope groups and requires separate data, calculations and filings.
Frequently asked questions
What is South Korea's corporate-tax rate in 2026?
For business years beginning on or after January 1, 2026, the national rates for ordinary for-profit corporations are 10% up to KRW 200 million, 20% up to KRW 20 billion, 22% up to KRW 300 billion and 25% above KRW 300 billion. Local corporate income tax is additional.
What is the combined corporate-tax rate in South Korea?
Local corporate income tax is generally 10% of the national corporate-tax amount. A simple top-rate illustration is therefore 25% national plus 2.5% local, or 27.5%, before credits, surtaxes, incentives and the company's detailed tax base.
Does South Korea have a global minimum tax?
Yes. South Korea applies Pillar Two rules to qualifying multinational groups meeting the EUR 750 million consolidated-revenue test, with a 15% jurisdictional minimum and a domestic top-up-tax component from 2026.