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Local Tax

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  • Local Tax

Taxable Objects and Payment Deadlines

Taxable Objects and Payment Deadlines : Tax,Taxable Objects or Purpose,Payment Period and Deadline
Tax Taxable Objects or Purpose Payment Period and Deadline
Acquisition Taxes Imposed on an individual who acquires real estate, vehicles, mechanical equipment*, aircraft, ships, standing timber, mining right, fishing right, golf course membership, riding club membership, condominium membership, sports complex membership, or yacht club membership Within 60 days of the date of acquisition
Registration License Taxes Classified into registration tax imposed on registration and filing for causes other than acquisitions; and license tax imposed on authorization or permission
  • Each year from Jan. 16th to 31st (for registration license tax for license)
  • Registration license tax (for registration): Prior to the date of registration or filing
  • Registration license tax (for license): Prior to the date of receiving the license certificate
Local Education Taxes Imposed to secure financial resources for the enhancement of local education finances required to improve the quality of local education
  • Acquisition tax and tobacco consumption tax: By the payment deadline
  • Residence tax (per capita), property tax and automobile tax (only on vehicles for non-business use): By the payment deadline
Residence Taxes Per capita portion imposed on individuals or corporations; Pro rata property portion with tax base of total floor area of a place of business; Employee portion imposed on the total amount of wages paid to employees
  • Per capita portion: collection (Aug. 16–31)
  • Pro rata property portion: report and payment (Jul. 1–31)
  • Employee portion: By the 10th day of the following month
Local Income Taxes Individual local income tax according to the Income Tax Act; Corporate local income tax according to the Corporate Tax Act
  • Corporate local tax: within 4 months of the last day of the business year
  • Capital gains or global income tax: Report and payment at the same time as income tax (May 1–31 of the following year)
※ Special collection: Report and pay by the 10th day of the month following the month to which the day for special collection belongs
Property Tax
  • Imposed on land, buildings, housing, aircraft and ships
  • Housing is a separate taxable object since its valuation includes attached land
  • Regular portion
  • Jul. 16-31: Half payment for housing portion and full payment for building
  • Sep. 16-30: Half payment for housing portion and full payment for land
※ If the payable amount of the housing portion is or below KRW 200,000, the full amount shall be notified in July.
Automobile taxes
  • Imposed on a vehicle registered or reported under the Motor Vehicle Management Act, and a dump truck or concrete mixer truck registered under the Construction Machinery Management Act, for possession and driving
  • Annual tax amount for passenger automobiles differs depending on whether the vehicle is used for business purposes or not.
  • Regular imposition : First period (Jun. 16-30) / Second period (Dec. 16-31)
  • Non-regular imposition : available on application for tax calculated on a daily basis for used cars
  • Annual tax amount : Lump-sum payment (Jan., Mar., Jun., Sep.) / Payment in installments (Mar., Jun., Sep., Dec.)
※ Source : Korea Institute of Local Finance (Local Tax Guide 2019)
※ Mechanical equipment : Mechanical equipment refers to mechanical equipment used for construction works, freight loading and landing, and mining, as prescribed by ordinances of the Ministry of the Interior and Safety, as well as construction machinery stipulated under the Construction Machinery Management Act and mechanical equipment similar thereto.
※ Refer to the appendix for relevant tax rates

Tax Reductions or Exemptions

Tax Reductions or Exemptions by Local Ordinances
Tax reductions or exemptions concerning foreign investment promotions
When foreign-invested companies or those conducting a technology business in new growth engine industries which have settled in individual-type Foreign Investment Zones, complex-type Foreign Investment Zones, or Free Economic Zones meet certain qualifications, they may benefit from certain advantages of reduction of and exemption from acquisition taxes and property taxes for fifteen years as prescribed by local ordinances.
Tax reductions or exemptions for companies in agro-industrial complexes
Company which intend to establish business operations in agro-industrial complexes by acquiring a closed or suspended factory within such complexes are eligible for a seventy five percent reduction of acquisition taxes if the acquisition is made by December 31, 2019.
Tax reductions or exemptions for special R&D zones
High-tech companies, research institutes, foreign-invested companies and foreign research institutes that acquire real estate for direct use in their own business by December 31, 2019 are eligible for exemption from acquisition taxes.
Tax Reductions or Exemptions based on the Restriction of Special Local Taxation Act
Tax Reductions or Exemptions based on the Restriction of Special Local Taxation Act : Regulations,Contents,Tax items (Reduction rate, %)(Acquisition Tax,Registration License Tax,Property Tax)
Regulations Contents Tax items (Reduction rate, %)
Acquisition Tax Registration License Tax Property Tax
Article 45.2 Reduction or exemption for scientific research institutes, etc. 100 100
Article 46.1 Reduction or exemption for research institutes affiliated with enterprises (mid-sized)
(except for large-scale companies’ institutes in over-concentration limitation zones)
35 35
Article 46.2 Reduction or exemption for research institute affiliated with enterprises
(except for large companies’ institutes in over-concentration limitation zones)
35 35
Article 46.3 Reduction or exemption for research institute affiliated with enterprises 60 50
Article 58.1 Reduction or exemption for venture businesses, etc. 50 50
Article 58.2 Reduction or exemption for cluster venture businesses, etc. Exclusion from heavy taxation Exclusion from heavy taxation
Article 58.3 Reduction or exemption for new technology-based business clusters 50 50(3years)
Article 58.4 Reduction or exemption for venture business development and promotion zones 37.5 37.5
Article 58.2.1 Reduction or exemption for operator of knowledge-based industry centers
(probation of 1 year for previous acquisition tax exemption)
35 37.5
Article 58.2.2 Reduction or exemption for occupants in knowledge-based industry centers 50 37.5
Article 58.3 Reduction or exemption for real estate of small and medium size start-ups 75 100 100/50
Article 71.1 Reduction or exemption for operators in logistics complexes 35 35
Article 71.2 Reduction or exemption for start-ups or businesses in enterprise city development zones 50 35
Article 75.2.1.1 Reduction or exemption for start-ups or businesses in enterprise city development zones 50 50
Article 75.2.1.2 Reduction or exemption for operators in enterprise city development zones 50 50
Article 75.2.1.3 Reduction or exemption for start-ups or businesses in regional development project zones 50 50
Article 75.2.1.4 Reduction or exemption for operators in regional development project zones 50 50
Article 75.3 Reduction or exemption for small and medium-size enterprises in crisis areas 50 50
Article 78.4.1 Reduction for occupants (newly established) in industrial complexes 50 35~75
Article 78.4.2 Reduction for occupants (with substantial repair) in industrial complexes 25
Article 79.1.2 Reduction or exemption for relocating corporations to provinces 100 100 100/50
Article 80.1 Reduction or exemption for relocating factories to provinces 100 100/50