The South Korean government is considering lowering the maximum corporate tax rate from 25 percent to 22 percent.
The South Korean government is internally considering revising the Corporate Tax Act in order to adjust the maximum corporate tax rate from 25 percent to 22 percent.
In 2017, the previous Moon Jae-in administration revised the tax law to raise the maximum rate from 22 percent to 25 percent and create a tax base of more than 300 billion won. Earlier, the Lee Myung-bak government lowered the maximum rate from 25 percent to 22 percent.
At present, the corporate tax rate applied to more than 300 billion won in tax base is 25 percent. It is 20 percent and 18 percent in the case of more than 200 million won to 300 billion won or less and 200 million won or less, respectively.
A downward adjustment of the maximum corporate tax rate is likely to lead to a decrease in tax revenue. The corporate tax, along with the income and value-added taxes, makes up the biggest part of the revenue. This year’s corporate tax revenue estimate amounts to 104 trillion won and the figure is likely to fall below 100 trillion won in the event of the adjustment.