The main focus of the 2018 Corporate Income Tax Law (CITL) reform is to encourage job creation by reforming the existing tax credits for corporate investment to create jobs and additional incentives to stimulate youth employment. Another focus is placed on strengthening the collection of income tax on high-income earners by expanding tax revenue sources through raising the CIT rate for taxable income over 300 billion Korean won (KRW). In addition, the reform proposals include significant changes that would affect cross-border transactions of multinational companies. In the government’s commitment to implement the Organisation for Economic Co-operation and Development’s (OECD’s) recommendations under the base erosion and profit shifting (BEPS) project, the proposals contain new rules to restrict the deduction for hybrid financial instruments and interest expense deductions.
Last Reviewed - 18 December 2018