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2023 Tax Law Amendments (Selected Items)


In December 2022, the National Assembly finalized and ratified the proposed tax law amendments submitted by the Ministry of Economy and Finance (the “MOEF”), with most of the amendments in effect as of January 2023.  The Presidential Decrees released subsequent to the ratification of the proposed tax laws have also been publicly released and are in effect as of February 28, 2022.

The following summary of the tax law/regulation amendments may be of relevance for overseas companies or individuals that operate businesses in Korea.

1.   Finance Tax

  • Two Year Deferral of Financial Investment Income Tax Regime and Taxation of Virtual Assets (Articles 4 and 37 of the Individual Income Tax Law (the “IITL”))

The commencement of the financial investment income tax regime (comprehensive taxation of income from shares, bonds, funds, investments in contract securities, derivative linked securities, derivatives, etc.) and taxation of income arising from transfers or loans of virtual assets are deferred for two years from January 1, 2023 to January 1, 2025.

  • Relaxation of “Majority shareholder” Threshold for Capital Gains Taxation on Sales of Domestic Listed Shares (Articles 94, etc. of the IITL, Articles 157 of the Presidential Decree of the IITL (“IITL-PD”))

Prior to the amendment, a “majority shareholder” subject to capital gains taxation on sales of listed Korean shares is a shareholder meeting one of the following thresholds: (i) the ownership percentage threshold: KOSPI 1%, KOSDAQ 2%, and KONEX 4% or (ii) the investment amount threshold: KRW 1 billion.  Under the amended tax law/regulation, the ownership percentage threshold is abolished, while the investment amount threshold is maintained.

Under the pre-amended rule, shares held by a taxpayer and its related parties are combined in calculating the above thresholds on ownership percentage and investment amount.  Following the amendment, the scope of related parties is narrowed in determining whether a taxpayer can be designated as a majority shareholder, and in cases where the taxpayer is not the largest shareholder, the aggregation rule for related parties is abolished.

The amended rules apply to sale transactions of shares conducted from January 1, 2023 onwards.

  • Reduction of Securities Transaction Tax (“STT”) Rate (Article 5 of the Presidential Decree of the Securities Transaction Tax Law (the “STTL”))

The STT rates have been changed as follows.  The changed rates are applicable to transfers conducted from January 1, 2023 onwards.


(KOSPI*) 2022: 0.23% → 2023 and 2024: 0.2% → 2025: 0.15%
* Including an agriculture and fishery tax of 0.15%


(KOSDAQ) 2022: 0.23% → 2023 and 2024: 0.20% → 2025: 0.15%


(KONEX, Non-listed, OTC) 2022: 0.43% → 2023: 0.35%

2.   Corporate Income Tax

  • Adjustment of Corporate Income Tax Rates and Tax Brackets (§55 of the Corporate Income Tax Law (the “CITL”))

The corporate income tax rates (including local income tax) have been reduced as follows.  The amended rates are applicable to fiscal years commencing from January 1, 2023.

Tax Base

Pre-amended Rate

Amended Rate

Less than KRW 200 million

10% (11%)

9% (9.9%)

KRW 200 million - 20 billion

20% (22%)

19% (20.9%)

KRW 20 - 300 billion

22% (24.2%)

21% (23.1%)

More than KRW 300 billion

25% (27.5%)

24% (26.4%)


  • Relaxation of Limit on Use of Net Operating Loss Carryforward (§§13, 45, 46-4, 76-13, and 91 of the CITL)

The limit on the use of net operating loss carryforward by ordinary enterprises, consolidated enterprises, merged/spun-off entities, and foreign entities has increased from 60% to 80% of the taxable income of a given fiscal year.  The relaxation applies to fiscal years commencing from January 1, 2023.

3.   Personal Income Tax

  • Extension of Application Period of Flat Tax Rate for Foreign Workers from Five Years to 20 Years (Article 18-2 of the Special Tax Treatment Control Law (the “STTCL”))

Under the revised STTCL rules, the flat tax rate regime (i.e., personal income tax rate of 20.9% including local income tax) is available to foreign employees for 20 years starting from the year in which the foreign employee begins working in Korea for the first time (extended from the five years stated under the pre-amended rule).  This regime is available for foreign employees whose 20-year period has not been lapsed as of January 1, 2023 since they first started working in Korea.

  • Adjustment to Individual Income Tax Brackets (Article 55 (1) of the IITL)

Individual income tax brackets are adjusted as follows.  The following figures apply to income earned from January 1, 2023 onwards.

Tax Rate
(including local income tax)

Tax Base




Up to KRW 12 million

Up to KRW 14 million


KRW 12 - 46 million

KRW 14 - 50 million


KRW 46 - 88 million

KRW 50 - 88 million


KRW 88 - 150 million

KRW 88 - 150 million


KRW 150 - 300 million

KRW 150 - 300 million


KRW 300 - 500 million

KRW 300 - 500 million


KRW 300 million - 1 billion

KRW 300 million - 1 billion


Over KRW 1 billion

Over KRW 1 billion


  • Tax Relief for Retirement Income (Article 48 (1) of the IITL)

To alleviate the tax burden on the working class, the amount of income deduction against retirement income based on the number of years of employment is increased as follows.  This applies to individuals who retire on or after January 1, 2023.


Period of Employment

Pre-Amendment Deduction 

Amended Rate

Up to 5 years

KRW 300,000 × Number of years of employment

KRW 1 million × Number of years of employment

6-10 years

KRW 1.5 million + KRW 500,000 x (Number of years of employment – 5 years)

KRW 5 million + KRW 2 million x (Number of years of employment – 5 years)

11-20 years

KRW 4 million +
KRW 800,000 × (Number of years of employment – 10 years)

KRW 15 million +
KRW 2.5 million × (Number of years of employment – 10 years)

Over 20 years

KRW 12 million +
KRW 1.2 million × (Number of years of employment – 20 years)

KRW 40 million +
KRW 3 million × (Number of years of employment – 20 years)


4.   Miscellaneous

  • Additional Procedural Requirements for Application of Withholding Tax Exemption for Non-Residents and Foreign Corporations (Articles 156-2 and 156-6 of the IITL, 98-4 and 98-6 of the CITL, 207-2 and 207-8 of the IITL-PD, 138-4 and 138-7 of the CITL-PD)

Under the amended rule, if the amount of a tax exemption/non-taxation claim is equal to or greater than KRW 1 billion, a foreign corporation’s incorporation-related documents, business information, and any documentation related to Korea-sourced income should be part of the application package for withholding tax exemption (prior to the amendment, only the application and the foreign entity’s certificate of tax residency were required).  The head of the competent tax office may deny or make a correction to the exemption/non-taxation if information in the tax application is different from the actual facts or is deemed to not satisfy the required conditions for the exemption/non-taxation.  The head of the relevant tax office may request additional information or documents if the submitted information is deemed insufficient to determine whether all the requirements for the tax exemption are satisfied.  The income payer may request information/documents from non-residents/foreign corporations to determine whether withholding should be made or exempted.  The amendment applies to exemption/non-taxation applications filed from January 1, 2023 onwards.


[Korean Version]