(1)

Restoration of Corporate Income Tax Rates

The government has restored corporate income tax rates to their 2022 levels by increasing the rates for each taxable income bracket by 1 percentage point.

The revised rates are as follows:
 

• 10% for taxable income of KRW 200 million or less

• 20% for taxable income over KRW 200 million up to KRW 20 billion

• 22% for taxable income over KRW 20 billion up to KRW 300 billion

• 25% for taxable income over KRW 300 billion

These amended rates apply to fiscal years commencing on or after January 1, 2026.
 

(2)

Rationalization of Timing of Gain or Loss Recognition for Sale of Goods 

Previously, gains or losses from the sale of goods were generally recognized on the date of delivery. However, a new proviso has been established to enhance taxpayer convenience and ensure consistency of the legal framework. Under this amendment, for conditional or time-limited sales of goods, the timing for recognizing gains or losses is now the date the sale becomes final—i.e., when the condition is fulfilled or the time limit expires. This amendment applies to sales made in taxable years commencing on or after the effective date (February 27, 2026) of the Presidential Decree.
 

(3)

Introduction of Administrative Fine for Non-Submission of Status Report of Foreign Corporation’s Liaison Office

To enhance the effectiveness of data submission regarding the liaison offices of foreign corporations, a fine of KRW 5 million will be imposed if a foreign corporation fails to submit status reports on its domestic liaison office or submits false information, thereby violating a corrective order issued by the head of the competent tax office. The amendment applies to cases of non-submission or false submission on or after January 1, 2026
 

(1)

Introduction of Obligation to Submit Application for Reduced Withholding Tax Rate on Korean Source Income of Foreign Corporations or Non-Residents 

Previously, to benefit from a reduced tax rate under a tax treaty, the beneficial owner of Korean-source income was required to provide an application for the reduced tax rate to the withholding agent, who was then responsible for maintaining those records. However, to strengthen the management of tax sources, a new obligation has been established requiring withholding agents to submit the received applications to the competent tax office. The submission deadline is the last day of February of the year following the payment year. This amendment applies to applications for a reduced tax rate filed on or after January 1, 2026.
 

(2)

Clarification of Scope of Donation for Korean-Source Other Income of Foreign Corporation 

Previously, “income arising from the receipt of gifted Korean assets” was defined as one type of other domestic-source income for foreign corporations. However, to prevent tax avoidance and clarify the scope of such gifts, the relevant provision has been refined to include “income from transfers that are made at a considerably low price—i.e., where the difference between the price paid by the foreign corporation and the market value of the Korean asset transferred is 30% or more of the market value”—as Korean-source other income. This amendment applies to income received on or after January 1, 2026.
 

(3)

Expansion of Scope of Partial Audit in Connection with Advance Pricing Agreement 

While tax audits must, in principle, cover all tax items that have reporting and payment obligation, the regulations allow for partial tax audits under certain specific circumstances—e.g., for stock transactions or suspected fraudulent transactions. To enhance the effectiveness of audits related to Advance Pricing Agreements (“APA”), the present amendment to the Presidential Decree expands the scope of partial tax audits. It now permits tax authorities to investigate the specific details of an APA application if the application is canceled, withdrawn, or if the procedure is discontinued after the filing of the APA application. This amendment applies to tax audits commencing on or after the effective date (February 27, 2026) of the Enforcement Decree.
 

(1)

Increase in Education Tax Rate 

Previously, a flat tax rate of 0.5% was applied to the gross receipts of financial and insurance companies as Education Tax. The revised regulations have now introduced new tax brackets and higher rates: a 0.5% rate applies to gross receipts of KRW 1 trillion or less, and a 1.0% rate applies to the portion exceeding KRW 1 trillion. This amendment applies to taxable periods commencing on or after January 1, 2026.
 

(2)

Reversion of Securities Transaction Tax Rate 

The Securities Transaction Tax rates for transfers of domestic stocks have been restored to their 2023 levels. For KOSPI-listed stocks, the rate has been adjusted from 0% to 0.05% (resulting in a total of 0.20% including the 0.15% Agriculture & Fishery Special Surtax). For KOSDAQ and K-OTC-listed stocks, the rate has been adjusted from 0.15% to 0.20%. This amendment applies to stock transfers occurring on or after the effective date (January 1, 2026) of the Enforcement Decree.
 

(1)

Increased Penalty for Issuance/Receipt of False Tax Invoices 

Previously, a penalty tax of 3% of the supply value was imposed in cases where tax invoices were issued or received without an actual supply of goods or services, or where a person who is not the business operator issued or received such invoices. To prevent tax evasion, the penalty tax rate has been increased from 3% to 4%. This amendment applies to fictitious tax invoices issued or received on or after January 1, 2026.