Category Taxation in South Korea

Tax Evasion Estimated at KRW 55 Trillion Per Year in South Korea

September 20, 2016 Taxation in South Korea

SEOUL – The size of Korea’s underground economy outweighs that similarly sized countries, leading to significant levels of tax evasion.

The results of new research released on September 19th Professor Kim Jong-hee of Chonbuk National University of Korea has shown that the size of the underground economy in South Korea exceeds that of other OECD countries.

It was estimated that on average between 1995 and 2014 the underground economy in South Korea made up 10.89 percent of the national GDP.

In comparison the average size of the underground economy in the other OECD countries was 8.06 percent, while among G7 countries the level was only 6.65 percent.

The prominent underground economy has also resulted in comparatively high levels of tax evasion, with the ratio of tax evasion-to-GDP in South...

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S.Korea Offers Extensive Tax Exemptions for R&D

July 29, 2016 Taxation in South Korea

SEOUL – Companies involved in robotics, artificial intelligence, 3D printing, and other high-tech areas will be eligible for extra tax breaks in South Korea.

On July 28th the government of Korea announced that it would implement several new tax measures in an aim to create several new “economic growth engines”.

The new tax regulations to be enacted by the government will allow small- and medium-sized businesses to claim up to 30 percent of their research and development expenses for tax purposes, if the expenses fall within the scope of 11 selected development sectors.

The chosen areas are all high-tech and potentially high-growth, such as artificial intelligence, 3D printing, hyper-plastics, robotics, and aerospace.

The 30 percent deductions are not open to large conglomerate organi...

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Gambling Tax Revenues Rise on S.Korea

June 27, 2016 Taxation in South Korea

SEOUL – Taxes on gambling are bringing in more revenues in Korea, though the rise are not expected to last over the rest of the current year.

New information released on June 27th by the National Gambling Control Commission of Korea indicates that the total tax revenues derived from taxation of gambling activities rose by 4 percent in 2015 compared to the level seen in the previous year.

The total of tax revenues collected from gambling activities reached KRW 2.42 trillion in 2015, compared to a total of KRW 2.32 trillion over the course of the previous year.

The rise in tax collections was spurred by a 12.1 percent increase in collection of taxes from casinos, and a 1.6 percent rise in collection of taxes from horse racing, which amounted to KRW 478.8 billion and KRW 1...

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S.Korea Offers Tax Free Plastic Surgery

March 10, 2016 Taxation in South Korea

SEOUL – In an effort to become a global hub for medical tourism, Korea has dropped the taxes on cosmetic surgery for foreigners.

On March 9th the Ministry of Health of South Korea announced that any foreigners receiving cosmetic surgery in the country will be eligible for a refund of the Value Added Taxes paid for the procedure.

The refunds will be paid automatically at any international airport in Korea when an eligible non-resident presents proof of payment for surgery and other medical costs at their departure.

The government hopes that by dropping the 10 percent VAT on cosmetic surgeries more tourists can be enticed to travel to Korea, ultimately boosting tourism spending, while also increasing growth and employment in the medical sector.

Further the government hopes that the increase...

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S.Korea Wont Cut Petrol Taxes

February 23, 2016 Taxation in South Korea

Smog Tax KoreaSEOUL – The government of Korea wont reduce the taxes on petrol, despite the fact that they now far outweigh the price of oil in every litre of petrol sold.

On February 22nd the Finance Minister of South Korea Yoo Il-Ho confirmed that the government would not heed public outcry to reform taxes on oil products.

Currently, a large portion of the price of petrol in Korea is made up of taxes, the majority of which are levied at a preset amount, and not pegged to the price of oil or petrol.

The state currently levies KRW 745.89 in tax per litre of petrol sold, additional taxes on the sale of oil based products bring the average tax bill per litre of petrol to as much as KRW 900 per litre.

It has been estimated that the large fixed taxes impede the reduction in the price of petrol to consume...

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