South Korea Tax Rates 2026: Income Tax, Corporate Tax, VAT and Withholding Tax

South Korea Individual Income Tax Rates for 2026

South Korea applies progressive national income tax rates from 6% to 45% to taxable global income. The tax is calculated by applying the rate to the relevant taxable-income band and deducting the statutory progressive deduction.

Employment income is normally subject to monthly withholding, followed by the employer's year-end tax settlement. Individuals with aggregate income that requires a final global income tax return generally file between 1 May and 31 May of the following year.

Local Income Tax

Local income tax is imposed in addition to national income tax. For individuals, it is generally equal to 10% of the national income tax liability. As a result, the combined marginal burden is commonly expressed as 6.6% to 49.5% before taking account of deductions, credits or special rules.

Special Flat Tax for Foreign Employees

Qualifying foreign employees may elect a flat national income tax rate of 19% on Korean employment income instead of the progressive rates. The current special regime generally applies for up to 20 years from the first date of providing qualifying services in Korea, subject to the statutory eligibility conditions.

When the flat-rate method is chosen, ordinary exemptions, income deductions, reductions and tax credits are generally not available for the employment income subject to the special regime. Local income tax is imposed separately, so the combined rate is generally 20.9%.

Income Deductions and Tax Credits

South Korea provides a range of deductions and credits depending on the taxpayer's circumstances. These may include the wage and salary income deduction, basic and dependent deductions, pension-related deductions or credits, earned-income tax credit, child-related tax credits, insurance, medical and education expense credits, qualifying donations, housing-related deductions and foreign tax credits.

Eligibility, limits and documentation vary by item. Non-residents have more restricted access to personal deductions and credits than residents.

South Korea Corporate Income Tax Rates for 2026

For fiscal years beginning on or after 1 January 2026, the National Tax Service publishes the following corporate income tax rates for ordinary profit-making corporations.

Local corporate income tax is imposed in addition to national corporate income tax. The effective combined burden therefore exceeds the national rates. Special rules may apply to small corporations, cooperatives, land transfers, retained earnings and companies qualifying for tax incentives.

Resident and foreign corporations

Domestic corporations are generally taxed on worldwide income. Foreign corporations with a permanent establishment in Korea are generally taxed on Korean-source income attributable to that permanent establishment. Korean-source income received by a foreign corporation without a Korean permanent establishment is commonly taxed through withholding, subject to domestic law and any applicable tax treaty.

South Korea Withholding Tax Rates for Non-Residents and Foreign Corporations

The following are principal domestic-law withholding rates before the additional local income tax and before application of an income tax treaty. Treaty rates may be lower when the recipient satisfies the treaty requirements and prescribed documentation rules.

South Korea VAT Rate for 2026

The standard South Korean Value Added Tax rate is 10% for general taxable supplies. Qualifying exports, services supplied abroad, international transportation and certain foreign-currency earning transactions may qualify for the 0% rate. Statutorily exempt categories include specified basic necessities and certain medical, educational, financial, insurance and other supplies.

A new business generally must register its business particulars within 20 days after starting business. VAT filing and payment obligations depend on the taxpayer type and statutory taxable period.

Capital Gains Tax in South Korea

Capital gains taxation depends on the asset, taxpayer status, holding period and other statutory conditions. Individuals may be subject to separate capital gains tax on transfers of real estate, certain shares and other specified assets. Applicable rates can differ substantially by asset category and ownership circumstances.

For resident corporations, capital gains are generally included in taxable corporate income, although additional corporate tax may apply to certain transfers of land, housing and related rights. For non-residents and foreign corporations without a Korean permanent establishment, statutory withholding may apply to specified Korean-source gains, subject to treaty protection where available.

Inheritance and Gift Tax

South Korea imposes inheritance and gift tax under separate legislation, with progressive rates that can reach 50% before considering applicable deductions, valuation rules, credits and special provisions. The tax base and filing obligations differ for residents and non-residents and depend on the location and nature of the property.

Other Corporate and Property-Related Taxes

Businesses and property owners may also encounter acquisition tax, property tax, comprehensive real estate holding tax, registration and licence-related local taxes, securities transaction tax, stamp tax and other national or local levies. Rates depend on the asset, transaction, location and taxpayer category and should be checked for the particular transaction.

South Korea Tax Filing and Payment Deadlines

Employers generally withhold wage and salary income tax during the year and complete a year-end tax settlement. Taxpayers with other aggregate income may have a separate global income tax filing obligation.

Official South Korea Tax Resources