Category Taxation in South Korea

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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Korea Hikes Cigarette Taxes, Smokers Quit

December 29, 2015 Taxation in South Korea

SEOUL – Smokers in Korea appear to be smoking less cigarettes, and some may have even quit, as the government has more than doubled the taxes on the sale of cigarettes.

Earlier this week the Korean non-government organization Korea Taxpayers’ Association (KTA) released new information showing that the country’s recent hike to cigarette taxes had very positive results.

In January this year the tax applicable to the sale of cigarettes was raised from KRW 1 500 per pack of cigarettes to KRW 3 318, raising the price of an average pack of cigarettes fro, KRW 2 500 to KRW 4 500.

As a result of the tax hike, the total tax revenues collected from the sale of cigarettes rose by approximately KRW 4.3 trillion, an increase of 63.9 percent compared to the previous year.
However, despite the rise ...

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Korea Tightens Rules for Foreign Investment

May 18, 2015 Taxation in South Korea

SEOUL – Tax authorities in Korea are aiming to stamp out tax evasion by requiring taxpayers to declare all of their overseas investments.

On May 18th the National Tax Service of Korea issued a statement announcing that taxpayers will now be required to submit detailed information about investments or properties they hold abroad.

Taxpayers will have until by June 1st to submit their information regarding their foreign holdings.

Any taxpayer who do not submit the required information or take steps to willingly hide information in their submission will face fines, and may be required to undergo a full tax audit in the near future.

The provision for the submission of investment information was originally enacted in 2011, however, prior to now the system was voluntary.

It is estimated that in ...

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South Korea See Tax Collection Boost

April 13, 2015 Taxation in South Korea

SEOUL – After years of continued tax shortfalls, tax authorities in Korea are now expecting to see a significant rise in revenues.

In a new report issued on April 13th the National Tax Service of Korea announced that the corporate tax revenues for the 2015 year could be well ahead of the government’s own estimates.

Over the four years since 2012 the government of Korea has seen persistent shortfalls in the collection of tax revenues, posting shortfalls of KRW 2.8 trillion, KRW 8.5 trillion, and KRW 10.9 trillion in 2012, 2013, and 2014 respectively.

The corporate tax revenues over the month March were 11 percent higher than during the same period in 2014.

As corporate tax revenues in Korea are paid in the year following the profit being made, authorities are now indicating that the pos...

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S.Korea to See Budget Deficit

January 12, 2015 Taxation in South Korea

SEOUL – South Korea looks set to face a fourth year of budgetary deficits.

In a parliamentary report issued on January 11th the government of South Korea indicated that the budgetary deficit over the course of 2015 may exceed expectations, and reach a level of KRW 3.4 trillion.

Previously the government had forecast that the tax revenues for the year would reach a level of KRW 218.2 trillion, resulting in a budget deficit of KRW 3 trillion, based on a nominal growth rate of 5.6 percent, however, the growth level has now be revised to 4.2 percent.

If the forecasted deficit is realized, Korea will see a deficit for the fourth year in a row.

According to some economic experts, the continuing budget deficits can be attributed to long-standing declines in consumer confidence and activity, and...

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