Tax in South Korea: VAT, income tax, company tax, capital gains
10%
South Korea charges 10% VAT on most goods and services. The rate is verified against National Tax Service (NTS), Republic of Korea on 19 August 2026; the top personal income-tax rate is 45% (2026 tax year, Korea Ministry of Government Legislation — Income Tax Act (소득세법)), and the headline company tax rate is 25% (OECD Corporate Tax Statistics).
VAT in South Korea
Value-added: VAT is charged on sales and reclaimed on purchases, so only the added value is taxed.
- Standard rate
- 10%
- Local name
- VAT — Value Added Tax
- Type
- VAT
- Reduced rates
- None on record
- Filing
- Quarterly
- Authority
- National Tax Service (NTS), Republic of Korea
- Current rate since
- 1 January 2000
Introduced 1977 (at a 10% standard rate)
South Korea introduced VAT in 1977 to consolidate the eight indirect taxes then in force into a single tax — the first full value-added tax in Asia. It launched at 10%, and that is still the rate today.
What it replaced: Eight separate indirect taxes, which VAT rolled into one levy as part of a wholesale simplification of the Korean tax system.
Income tax in South Korea
The top personal income-tax band is 45% for the 2026 tax year.
Company tax in South Korea
The headline corporate income tax rate is 25%. In effect since 1 January 2026.
Indicative only: confirm with Korea (Republic of)'s national tax authority. OECD 2026: central statutory CIT 25%, combined (central+sub-central) 27.5%; sub-central CIT 2.5%; small-business combined 11% Reduced rate 10%, not modelled as a small-company rate: OECD 'targeted at small business' central rate; qualifying conditions not stated in OECD data.
Capital gains tax in South Korea
- Shares
- Listed shares: exempt for small shareholders trading on the exchange; capital gains tax applies to listed shares transferred by major shareholders (and off-exchange transfers by small shareholders). Major-shareholder rate: unconfirmed from official page in this pass - lead: 20% on taxable gains up to KRW 300m and 25% above (30% for non-SME shares held under 1 year).
- Property
- Real estate held 2+ years: basic progressive capital gains tax rates 6%-45% (from 2023: 6% up to KRW 14m rising to 45% over KRW 1bn); short holdings of housing taxed at 70% (<1 year) / 60% (<2 years); unregistered assets 70%; non-business land basic rate +10pp; multi-home owner surcharges in adjusted target areas were suspended for housing held 2+ years and sold 10 May 2022 - 9 May 2026.
- Holding period
- unconfirmed (lead: <1 year holding by major shareholder of non-SME at 30%)
Did you know? South Korea tax facts
South Korea set its VAT at 10% in 1977 and has never moved it — close to half a century at exactly the same rate, while the OECD average climbed to 19.3%.
The OECD records it plainly: VAT was introduced in Korea in 1977 at a standard rate of 10.0% and has remained at this rate throughout. Korea still squeezes more out of it than most — its VAT Revenue Ratio of 0.73 in 2022 was well above the OECD average of 0.58, because the base is broad and enforcement is tight.
Source: OECD Consumption Tax Trends — Korea ↗
More stories, for every country that has one, on the tax facts page.
Ask your AI assistant about tax in South Korea
The figures on this page are callable by any MCP-compatible assistant through the free Tax MCP. Add https://taxmcp.ai2fin.com as a custom connector in Claude, ChatGPT, Cursor or your own agent — no login, no API key — then ask:
- “What is the VAT rate in South Korea, and what is the source?”
- “Estimate income tax in South Korea on KRW 60,000 for 2026.”
- “What is the company tax rate in South Korea and how is it sourced?”
Connect in three steps, and what a connected answer looks like: Tax MCP.
South Korea, answered
Questions about tax in South Korea
- What is the VAT rate in South Korea?
- The standard VAT (Value Added Tax) rate in South Korea is 10%, verified against National Tax Service (NTS), Republic of Korea on 19 August 2026. Value-added: VAT is charged on sales and reclaimed on purchases, so only the added value is taxed.
- What is the top income tax rate in South Korea?
- The top personal income-tax band in South Korea is 45% for the 2026 tax year, verified against Korea Ministry of Government Legislation — Income Tax Act (소득세법) on 6 October 2026. The free income-tax calculator on this site works through the bands below it, and shows the rate table it used.
- What is the company tax rate in South Korea?
- The headline corporate income tax rate in South Korea is 25%, as published by OECD Corporate Tax Statistics (checked 6 October 2026, verification pending). Indicative only: confirm with Korea (Republic of)'s national tax authority. OECD 2026: central statutory CIT 25%, combined (central+sub-central) 27.5%; sub-central CIT 2.5%; small-business combined 11% Reduced rate 10%, not modelled as a small-company rate: OECD 'targeted at small business' central rate; qualifying conditions not stated in OECD data.
- How is capital gains tax charged in South Korea?
- In South Korea, the regime is mixed, verified against National Tax Service (NTS) - capital gains tax rates on 6 October 2026. On shares: Listed shares: exempt for small shareholders trading on the exchange; capital gains tax applies to listed shares transferred by major shareholders (and off-exchange transfers by small shareholders). Major-shareholder rate: unconfirmed from official page in this pass - lead: 20% on taxable gains up to KRW 300m and 25% above (30% for non-SME shares held under 1 year). Holding period: unconfirmed (lead: <1 year holding by major shareholder of non-SME at 30%)
- Can an AI assistant look up tax rates for South Korea?
- Yes. The free Tax MCP at https://taxmcp.ai2fin.com gives Claude, ChatGPT, Cursor or any MCP-compatible agent the same sourced figures as this page: the VAT rate, an income-tax estimate, the company tax rate, the capital gains rule and a side-by-side comparison with other countries, each answer citing the authority and the date it was checked. Add the endpoint as a custom connector; there is no login or API key.
Sources
- National Tax Service (NTS), Republic of Korea
- Korea Ministry of Government Legislation — Income Tax Act (소득세법)
- OECD Corporate Tax Statistics
- National Tax Service (NTS) - capital gains tax rates
- OECD Consumption Tax Trends — Korea
Last checked 6 October 2026. General information computed from published government rates, not tax advice. Check the linked authority or a registered adviser before relying on a figure.
See every rate side by side in the tax rates table, put South Korea next to another country in the comparison tool, or read the tax facts.
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