Korean Corporate Tax Calculator
Corporate tax and local corporate income tax from your tax base, including how much more a property rental company pays.
Every bracket went up one point in 2026
Your tax base
Result
Corporate and local income tax together come to ₩44M. A tax base of ₩300M falls in the 20% bracket, giving an effective rate of 14.67%.
Corporate tax
₩40M
20% marginal rate
Local corporate income tax
₩4M
standard rate applied
Total tax
₩44M
14.67% effective
Local income tax is not simply 10% of the corporate tax. It has its own rate table applied to the tax base (지방세법 제103조의20). The standard rates are built so the result works out to a tenth of the corporate tax, but a local government may adjust them by up to ±50% by ordinance, so the real burden can differ. Where a company has premises in several jurisdictions, the tax is apportioned by employee numbers and floor area.
| Tax base | ₩300M |
|---|---|
| Bracket rate applied | 20% |
| Corporate tax | ₩40M |
| Local income tax (standard rate) | ₩4M |
| Local corporate income tax | ₩4M |
| Total tax | ₩44M |
The rates are in 법인세법 제55조제1항제1호: 10% up to ₩200M; ₩20M plus 20% of the excess from ₩200M to ₩20B; ₩3.98B plus 22% of the excess from ₩20B to ₩300B; ₩65.58B plus 25% above ₩300B. Every bracket rose one point in 2026. Through 2025 they were 9%, 19%, 21% and 24%. A company subject to faithful-filing confirmation, such as one whose main business is property rental (제60조의2제1항제1호), pays a flat 20% up to ₩20B under 제2호 of the same paragraph and so gets no reduced rate on the first ₩200M. A business year under twelve months is annualised and apportioned under 제55조제2항. Local corporate income tax uses the standard table in 지방세법 제103조의20제1항, which a local government may adjust by ±50% under 제2항. This calculator stops at the computed tax. It does not apply credits or reductions, the tax on gains from land transfers (제55조의2), penalty taxes or interim prepayments.
How this works
What it calculates
This calculator works out the corporate income tax a Korean company pays on a business year's income, plus the separate local corporate income tax layered on top. Enter the tax base for the year, whether property letting is the main business, the number of months in the business year and any local ordinance adjustment, and you get the corporate tax, the marginal rate, the local tax, the total and the effective rate.
Corporate tax is charged on the tax base, not on accounting profit. The tax base is net income from the financial statements after tax adjustments that add back costs the tax law does not allow and remove items it exempts. This calculator takes the number after those adjustments and handles the final step of applying the rate table.
Who uses it and when
Directors and bookkeepers use it after closing the books and before filing, to get a rough figure. The return and payment are due within three months of the end of the business year, so a December year-end means the end of March. Entering the expected profit toward year-end lets you set aside the cash in advance.
It is also for people setting up a company or considering a property-letting company. How tax is computed when the first business year is only a few months long, and how much the rate changes when property letting is the main business, both show up here in won. To compare against a sole proprietorship, there is a separate company-versus-individual calculator.
Legal basis and how the maths runs
The rates are in 법인세법 제55조제1항. For an ordinary company there are four bands: 10% on a tax base up to ₩200 million, 20% up to ₩20 billion, 22% up to ₩300 billion and 25% above that. The scale is marginal, so crossing ₩200 million does not put the whole base at 20%; only the part above the line is taxed at that rate.
A company covered by 법인세법 제60조의2, such as one whose main business is property letting, does not get the low band under paragraph 1 item 2. It pays 20% from the first won, so the smaller the company, the larger the gap against an ordinary company with a base of ₩200 million or less. When the business year is shorter than twelve months, 제55조제2항 requires the base to be annualised to twelve months, taxed on that scale and then prorated back to the actual months; without this, a progressive scale would let a short year slip into the lower bands.
Local corporate income tax is not 10% of corporate tax. 지방세법 제103조의20 applies its own rate table to the tax base: 1% up to ₩200 million, 2% up to ₩20 billion and so on, designed so that at the standard rates the result equals one tenth of the corporate tax. But a local government may raise or lower the standard rate by ordinance within 50%, so the real burden can differ, which is what the adjustment field is for.
A worked example
Take the default on screen, a ₩300 million tax base over a twelve-month year. The first ₩200 million at 10% is ₩20 million and the remaining ₩100 million at 20% is another ₩20 million, so corporate tax is ₩40 million. Local tax at the standard rates is ₩4 million, for a total of ₩44 million, or 14.67% of the base. The marginal rate is 20%, but the effective rate is lower thanks to the first band.
If a property-letting company earned the same ₩300 million, 20% would apply to all of it: ₩60 million of corporate tax, ₩6 million of local tax, ₩66 million in total, ₩22 million more than the ordinary company. And if an ordinary company earned ₩300 million in a six-month first year, the base is annualised to ₩600 million, taxed to ₩100 million and halved back to ₩50 million of corporate tax, ₩55 million in total, ₩11 million more than a naive calculation without annualising.
Common mistakes
The most common mistake is using the old rates. Each band moved up a step, and many people still remember the previous figures. The next is treating local tax as 10% of corporate tax. At the standard rates the result is the same, but in a municipality with an ordinance adjustment it is not, and the local tax is filed separately with the municipality where the business is located.
Entering net income as the tax base is another error. Entertainment expenses over the limit, non-business costs and depreciation over the limit are all added back, so the base differs from book profit. The calculator also ignores tax credits and exemptions, so employment or investment credits reduce the figure shown here. Whether a company counts as a property-letting company depends on letting being the main business together with conditions on controlling-shareholder ownership and the number of regular employees, so that classification needs the statute and a tax adviser.
About this calculator
When to use it
Use this after closing the books for a Korean company. It applies the Korea corporate tax rate brackets to taxable income and adds local income tax on top, so the Korean corporate tax rate you see is the combined burden rather than the headline rate. Corporate tax Korea filings are due within three months of year end.
What it calculates
Corporate tax and local income tax, with the rate rise that started in 2026.
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Common questions
- What are the corporate tax rates?
- 10% on a tax base up to ₩200M; ₩20M plus 20% of the excess from ₩200M to ₩20B; ₩3.98B plus 22% of the excess from ₩20B to ₩300B; and ₩65.58B plus 25% above ₩300B.
- I thought the bottom rate was 9%?
- It was, through 2025. From 1 January 2026 every bracket rose one point, so business years from 2026 use 10%, 20%, 22% and 25%.
- Why does a property rental company pay more?
- A company subject to faithful-filing confirmation (which includes one whose main business is property rental) does not get the 10% rate on the first ₩200M and pays 20% from the start. On a ₩300M tax base an ordinary company pays ₩40M while such a company pays ₩60M. It is the single most commonly missed point among landlords who incorporated to save tax.
- Is local income tax just 10% of the corporate tax?
- That is the common belief, but it is not quite right. It has its own rate table applied to the tax base. The standard rates are designed so the result equals a tenth of the corporate tax, but a local government may vary them by up to ±50% by ordinance, so the actual burden can differ.
- What if the business year is shorter than twelve months?
- The tax base is divided by the number of months and multiplied by twelve to annualise it, the rates are applied, and the result is multiplied back by months over twelve. Because the rates are progressive, skipping this would land a short year in a lower bracket and understate the tax.
- Does this include credits and reductions?
- No. This calculator stops at the computed tax. R&D credits, the integrated investment credit, the special SME reduction, penalty taxes, interim prepayments and the tax on gains from land transfers are all outside it.
- Do the same rates apply to a foreign-owned company?
- A company incorporated in Korea is a domestic corporation whatever its shareholders' nationality, so the rates are identical. 법인세법 decides domestic status by place of incorporation. A Korean branch of a foreign corporation is different: it is taxed only on Korean-source income, and branch tax applies for some countries. Which structure is better depends on the tax treaty as well.
Compare running this as a sole trader instead
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Proposed changes that touch this calculation
The 2026 tax reform bill has 31 items bearing on this calculation, the earliest from 2026-10-01. None of it has passed the National Assembly, so the calculator still applies the law as it stands.
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