Korea: Tax changes affecting loss carryforwards | KPMG | GLOBAL
Share with your friends

Korea: Tax changes affecting loss carryforwards, excess retained earnings, others

Korea: Tax changes affecting loss carryforwards

Tax law amendments, approved by the National Assembly in late 2016 and generally effective in 2017, include the following provisions:


Related content

  • An extension of time during which foreign workers can apply a “flat tax” to their employment income for their first five years of employment in Korea—extended to the end of 2018, but subject to an increase in the flat tax rate from 17% to 19%
  • Foreign companies allowed to apply a loss carryforward up to 80% of their taxable income for the tax year
  • A change to the “excess retained earning” tax rules—companies subject to the tax on “excess retained earnings” (i.e., earnings not paid out as investments, salaries, or dividends of certain taxpayers) can make a change to the method elected for determining the tax before the end of the three-year period
  • New business types identified for tax incentives, to encourage foreign investment in new industries
  • Tax deferral allowed for mergers between “sister” companies (companies wholly owned by the same parent company)


Read a 2017 report prepared by the KPMG member firm in South Korea

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal