Korea, Republic of

On 30 November 2025, the National Assembly approved comprehensive amendments to 11 tax laws, including the Corporate Income Tax Law, marking a material shift in corporate and international taxation.  The package raises the corporate income tax rate by one percentage point across all brackets and introduces a new tax credit for webtoon production, while broadening incentives for new growth technologies and defense-industry commercialization facilities.

To reinforce the domestic capital market and encourage shareholder returns, the reforms introduce separate progressive taxation for dividends from high‑dividend listed companies.  It also revamps the integrated employment tax credit to prioritize long‑term hiring and retention through graduated incentives. The education tax on financial institutions shall increase by 0.5 percentage points.

Internationally, effective 1 January 2026, Korea will implement a domestic minimum top‑up tax aligned with OECD Pillar Two mechanics, ensuring that domestic constituent entities with an effective tax rate below 15% are subject to a top‑up tax consistent with GloBE outcomes. The amendments also introduce a new penalty regime for foreign corporations’ liaison offices that fail to comply with information submission requirements and tighten withholding procedures by requiring domestic withholding agents to submit completed applications and supporting documents for non-resident reduced-treaty rate claims to the tax authorities irrespective of an explicit request.  Collectively, these measures aim to promote innovation, enhance market competitiveness, and align Korea’s tax framework with evolving global standards.