Tax System of the Republic of Korea 2024

Published on May 30, 2024
Published by Tax Policy Analysis 1, Estimates & Tax Analysis Department

   Taxation serves dual purposes in national finance management: raising funds and acting as a policy tool for income redistribution and economic stabilization. With challenges like low fertility rates and aging increasing fiscal expenditures, the role of taxation in securing financial resources is increasingly more crucial. Furthermore, amidst prolonged uncertainties in the global economy and persistent high levels of inflation and interest rates, there is a growing anticipation for tax policies to play a vital role in revitalizing the Korean economy.
   In response to these demands, tax policies are being actively promoted and implemented through the legislative process of the National Assembly, in accordance with the tax legalism stipulated in the Constitution. To facilitate understanding of the tax system and policies within this framework, the National Assembly Budget Office has been annually publishing "Tax System of the Republic of Korea" since 2020, and this publication faithfully reflects recent tax law revisions and policy trends. This year, on the occasion of the opening of the 22nd National Assembly, to provide timely insights into international tax policy issues amidst a rapidly changing social and economic landscape, a review of international trends, which includes topics such as the current status of income tax support related to childbirth and childcare, windfall tax, and the temporary introduction of social solidarity funds, has been added and supplemented.
   ‘Part 1: Understanding of Taxes’ provides an overview of common tax theory, covering the concept, function, and establishment process of taxes, as well as Korea's tax system and current status. 'Part 2: National Taxes' and 'Part 3: Local Taxes' provide insights into the history of significant revisions, the key provisions of the revised tax laws set to be implemented in 2024, and international trends, facilitating understanding of the tax system for each tax item, along with the primary issues associated with each. Additionally, 'Part 4: Tax Expenditures' offers information on Korea’s tax expenditure status and management system.