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2023 Tax Law Amendment Proposals Announced by the Ministry of Economy and Finance
The ‘2023 Tax Law Reform Proposals’ were announced by the Ministry of Economy and Finance on July 27. The proposals address some of the issues communicated at a recent meeting between the KOTRA Ombudsman Office and foreign chamber representatives on July 18 to discuss improvements to the tax laws. The meeting was attended by ECCK President Christoph Heider and ECCK Tax Committee Chairperson Robert Browell, Partner from PwC Korea, to share opinions on tax-related matters foreign invested companies are facing.
From the issues discussed at the meeting, the proposals summarized below have been announced which will take effect from January 1, 2024 if approved:
① The income tax reduction for foreign engineers will be extended for five more years until December 31, 2028.
② The flat tax rate of 19% for foreign employees will be extended for five more years until December 31, 2028.
③ Housing allowances will be permanently excluded from labor income for the application of the flat tax rate of 19% for foreign employees.
We view the proposals as positive developments and directly address some of the issues the ECCK have been advocating for on behalf of ECCK member companies through the ECCK’s annual White Paper and attendance at government meetings. The ECCK will continue to actively cooperate with the relevant authorities until the tax law amendments pass through the National Assembly and are finalized.
If you have any tax-related issues that you would like us to raise with the authorities or would like to attend future ECCK Tax Forums that are held on a quarterly basis, please contact the ECCK Tax Committee/Forum Manager Siyoon Kim (siyoon.kim@ecck.or.kr).
Check below to read the ‘2023 Tax Law Amendment Proposals’ (please note that the documents are only provided in Korean).
2023 Tax Law Amendment Proposals Announced by the Ministry of Economy and Finance
The ‘2023 Tax Law Reform Proposals’ were announced by the Ministry of Economy and Finance on July 27. The proposals address some of the issues communicated at a recent meeting between the KOTRA Ombudsman Office and foreign chamber representatives on July 18 to discuss improvements to the tax laws. The meeting was attended by ECCK President Christoph Heider and ECCK Tax Committee Chairperson Robert Browell, Partner from PwC Korea, to share opinions on tax-related matters foreign invested companies are facing.
From the issues discussed at the meeting, the proposals summarized below have been announced which will take effect from January 1, 2024 if approved:
① The income tax reduction for foreign engineers will be extended for five more years until December 31, 2028.
② The flat tax rate of 19% for foreign employees will be extended for five more years until December 31, 2028.
③ Housing allowances will be permanently excluded from labor income for the application of the flat tax rate of 19% for foreign employees.
We view the proposals as positive developments and directly address some of the issues the ECCK have been advocating for on behalf of ECCK member companies through the ECCK’s annual White Paper and attendance at government meetings. The ECCK will continue to actively cooperate with the relevant authorities until the tax law amendments pass through the National Assembly and are finalized.
If you have any tax-related issues that you would like us to raise with the authorities or would like to attend future ECCK Tax Forums that are held on a quarterly basis, please contact the ECCK Tax Committee/Forum Manager Siyoon Kim (siyoon.kim@ecck.or.kr).
Check below to read the ‘2023 Tax Law Amendment Proposals’ (please note that the documents are only provided in Korean).