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Tax rate for resident companies

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.

Tax rate on long-term capital gains

Capital gains are taxed at the normal corporation rate.

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%,

Tax rate on branches

The Corporate tax is levied on branches (Chijon) as all the other companies,

Fiscal year

The fiscal year begins on January 1-st and ends on December 31 of the same year.

Income tax rate

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,

Standard rates

10%

Reduced rates

Certain favoured or essential supplies are exempted, as well as export goods and services.

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.

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. These auditors 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 preceding the annual meeting.

Professionals and representative organizations
” Korean Institute of Certified Accountants “.