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South Korea - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
2005 tax schedule: the rate of the company tax is 13% of the amount of profits if these are lower than 100 million wons; otherwise, tax rate is 25% of the amount of profits. A resident surtax of 10% of corporate tax is also imposed.
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Taxe rate on long-term capital gains |
Capital gains are taxed at the normal corporation rate.
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
Rate is 15% when the participation of the parent company in the capital of the subsidiary is lower than 10%,
Rate is 10% when the participation of the parent company in the capital of the subsidiary is superior to 10%,
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Tax rate on branches |
The Corporate tax is levied on branches (Chijon) as all the other companies,
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Income tax
Fiscal year |
The fiscal year begins on January 1-st and ends on December 31 of the same year.
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Income tax rate |
| 0-10 millions Wons | 9% of tax base | | 10 millions 40 millions Wons | 0.9 million Won + 18% of the amount exceeding 10 million Won | | 40 millions 80 millions Wons | 6.3 million Won + 27% of the amount exceeding 40 million Won | | Beyond 80 millions Wons | 17.1 million Won + 36% of the amount exceeding 80 million Won |
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Tax deductions or
other allowances |
There are several types of deductions for the taxpayers in South Korea, For further details, you must contact local tax authorities,
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VAT rates
Standard rates |
A single tax rate of 10%,
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Reduced rates |
certain favoured or essential supplies are exempted, as well as export goods and services.
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Other important taxes
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Name of tax |
Rate |
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Donations and successions
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10% to 45%
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Wealth tax
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Progressive tax from 0,3% to 7% on the land patrimony,
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Interests and royalties
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They are subjected to a restraint at the source at a maximum rate of 10% giving right to a tax credit of an equivalent amount,
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Accounting
Introduction
South Korean accounting principles were developed by decrees and regulations from the Korean Ministry of Finance (Jae moo bu). In January, 1982, " Securities and Exchange Commission" has published a description of the Financial and Accounts Standards which have to be respected by companies. This text undergoes numerous modifications especially the one of March, 1990, particularly important.
General accounting principles
PROFIT AND LOSS ACCOUNT: on December 31 n, to be compared with n-1
1) Running products
2) Gross profit
3) Running expenses
4) Running income
5) Cost of global financing
6) Profits before income tax
7) Net profit.
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Obligations and publications
The Business Code of South Korea doesn't give any details the obligations concerning the book-keeping or the accounts attestation. Nevertheless, companies keep up to date an accounting journal, a ledger, a state of inventory and establish annually documents necessary for the financial analysis (balance sheet, profit and loss account, annexes).
Certification and auditing
The external audit of joint-stock Companies Act forces all the companies to appoint each year an external independent auditor. Theseauditors must be guaranteed by the Korean Institute of Certified Public Accountant (KICPA) and have to assure the Korean government of the quality and the precision of the established financial information. This information is published to the shareholders at least a week preceeding the annual meeting.
Professionals and representative organizations
" Korean Institute of Certified Accountants ".
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Export Entreprises SA ©, All rights reserved
Last modified in
January 2003
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