A Guide to Corporate Taxation in South Korea

Tax services in South Korea can be the difference between a smooth market entry and a compliance catastrophe. A foreign company entering South Korea might already be expecting roadblocks, but what are the solutions to this big legal barrier between profit and failure?

This article will answer everything you need to know about corporate taxation in South Korea. We’ll cover corporate income tax (CIT) rates, mandatory compliance requirements, transfer pricing rules, and incentives. After you’re done, your foreign company will be more than ready to make the most of South Korea’s wealthy market full of opportunity.

Corporate Income Tax (CIT) in South Korea

As of 2025, the current corporate income tax (CIT) rate in South Korea is as follows:

Taxable income	Corporate tax rate
≤KRW 200 million	9%
KRW 200 million to KRW 20 billion	19%
KRW 20 billion to KRW 300 billion	21%
≥KRW 300 billion	24%

Additionally, large multinational groups also need to account for South Korea’s implementation of the Organization for Economic Co-operation and Development (OECD) Pillar Two, which sets the global minimum tax. Companies with consolidated revenues above KRW 1 trillion and a quarter must ensure they pay at least 15% tax in every jurisdiction where they operate.

Mandatory Compliance Requirements in South Korea

Corporate income tax filings must typically be submitted within three months after the fiscal year-end. Payment is completed through Hometax, an online system provided by the National Tax Service (NTS). Companies operating on a calendar year must file by March 31. In addition, South Korea requires interim tax payments halfway through the fiscal year, a detail that foreign companies frequently overlook.

VAT compliance is another major pain point. Electronic tax invoices are mandatory for most B2B transactions, and mistakes in issuing or reporting them can lead to penalties. VAT is filed quarterly, and late submissions trigger automatic fines. This is where tax services in South Korea come in to lighten the load.

Transfer Pricing Rules in South Korea

Transfer pricing occurs when transactions of goods and services are being done by businesses owned by the same parent company. This is important if you’re establishing a branch in South Korea but have other businesses elsewhere. South Korea enforces highly detailed transfer pricing documentation requirements. Companies must prepare:

• A Local File

Includes a detailed breakdown of all related-party transactions, analysis of assets, and financial statements for the local branch. Must be submitted in Korean.

• A Master File

Includes a chart of the global company’s organizational structure, a description of products, supply chains, and intangible assets. May be first submitted in English, but must be followed up with a Korean translation within one month.

• A Country-by-Country Report (CbCR)

Includes an overview of total revenues, business activities, and other relevant details for every country where the multinational company operates. Must be submitted in Korean and English.

All must be submitted within the CIT filing deadline. South Korea’s tax authorities frequently conduct transfer pricing audits, making timely preparation essential for foreign investors. For companies wanting their tax calculation and planning to be done accurately and submitted on time, consider utilizing tax services in South Korea.

Tax Incentives and Opportunities for Foreign Companies

Despite its strictness, South Korea offers valuable tax incentives, especially for companies involved in high-tech manufacturing, R&D, green technologies, and job creation. Eligible companies may receive CIT reductions, local tax cuts, and cash grants for strategic projects.

Foreign-invested companies may also access R&D tax credits tied to payroll increases, facility investments, and innovation spending. However, these incentives often require planning and detailed documentation to qualify.

And there’s more. Small and Medium Enterprises (SMEs) can tap into a major perk right now: 

• Until the end of 2026, they can claim a 50% corporate income tax credit on any income earned from transferring patents or qualifying technology.
• Until the end of 2027, domestic companies that acquire tech-driven, innovative SMEs can get a 10% tax credit capped at the value of the technology they purchase.

Last but not least, foreign investors get a generous break on acquisition and property taxes, enjoying up to 15 years of exemption from any qualifying property they buy and hold. They’re also off the hook for customs duties, VAT, and individual consumption taxes when bringing in approved capital goods. If you want more comprehensive information, employing tax services in South Korea is the way to go.

Work with Doube M to See Real Results in South Korea

South Korea rewards companies that prepare early, plan carefully, and comply consistently. With multiple layers of tax, from CIT, VAT, payroll contributions, and transfer pricing, foreign firms rely on expert tax services in South Korea to avoid penalties, secure incentives, and stay audit-ready.Expanding into South Korea can feel like navigating a tax minefield. What you need is expert guidance that can get you through unscathed. If you want a consultation that keeps you compliant, reduces risk, and unlocks every incentive available, reach out to Double M today. Let’s build a tax strategy that doesn’t just support your success today, but all the days after.