As of 2026, South Korea’s corporate tax framework is governed primarily by the Corporate Tax Act for national corporate income tax and the Local Tax Act for local corporate income tax. For practical purposes in 2026, the National Tax Service identifies the applicable corporate tax rate table as the one that applies to business years beginning on or after January 1, 2025.

1. Standard corporate tax rate in South Korea in 2026

For an ordinary domestic corporation, the national corporate income tax rates are as follows:

  • 10% on the tax base up to KRW 200 million
  • 20% on the portion over KRW 200 million up to KRW 20 billion
  • 22% on the portion over KRW 20 billion up to KRW 300 billion
  • 25% on the portion over KRW 300 billion

In addition, South Korea imposes local corporate income tax. The standard local corporate income tax rates are generally:

  • 1%
  • 2%
  • 2.2%
  • 2.5%

applied to the corresponding corporate tax brackets. On a simple standard-rate basis, this results in an approximate combined burden of 11%, 22%, 24.2%, and 27.5% before any tax credits, exemptions, deductions, or special surtaxes. Under the Local Tax Act, local governments may adjust the local rate by ordinance within the statutory permitted range.

2. Which corporations are taxed under these rules

Under the Corporate Tax Act, the basic taxpayers are:

  • Domestic corporations
  • Foreign corporations with Korean-source income

A domestic corporation is generally taxed on its worldwide income, while a foreign corporation is taxed only on Korean-source income, subject to the applicable rules and any relevant tax treaty.

Under the Korean Commercial Act, the recognized company types include:

For ordinary corporate tax purposes, these company forms do not each have their own separate headline corporate tax rate table. In practice, the key distinction is whether the entity is treated as a domestic corporation, a foreign corporation, a non-profit corporation, or a corporation falling into a specific special category under tax law.

3. Non-profit corporations and special categories

A non-profit domestic corporation is not taxed in the same way as an ordinary for-profit company on all income. Under the Corporate Tax Act, its taxable income is generally limited to certain categories such as profit-making business income and certain specified income items, rather than all income in the same way as a standard business corporation.

In addition, Korean tax law includes certain special corporate categories that may be subject to different rate treatment or special rules. One example is the domestic corporation referred to in Article 60-2 paragraph 1 item 1 of the Corporate Tax Act, which is treated differently under the rate provisions. There are also separate special rules for certain land and building transfers, meaning that real-estate-related gains may be subject to additional tax treatment beyond the ordinary annual corporate tax brackets.

4. FDI companies: is there a separate corporate tax rate?

As a general rule, the answer is no. A company that qualifies as a foreign-invested enterprise under the Foreign Investment Promotion Act does not receive a separate general corporate tax rate merely because it has foreign ownership.

If the foreign investor establishes or acquires a Korean corporation, that Korean entity is generally taxed as a domestic corporation under the normal corporate tax rate structure. In other words, an ordinary foreign-owned Korean subsidiary is generally subject to the same standard corporate tax brackets as a Korean-owned domestic company.

For more on this topic, see our article on Foreign Direct Investment in South Korea.

That said, Korea does provide specific FDI-related tax incentives in limited cases under the Restriction of Special Taxation Act. These are not general FDI tax rates. Rather, they are special incentive regimes that may apply only if the foreign investment falls within the relevant statutory categories and conditions, such as qualifying technology or designated development and investment projects.

5. Foreign corporations operating in Korea without a Korean subsidiary

The analysis is different when the business is carried on by a foreign corporation directly, rather than through a Korean-incorporated subsidiary.

Under the Corporate Tax Act, a foreign corporation may have a permanent establishment in Korea if it has, for example, a branch, office, factory, certain construction or installation sites, or a qualifying service presence in Korea for the statutory period.

Where a foreign corporation has a Korean permanent establishment, Korea may tax the Korean-source income attributable to that establishment. If there is no Korean permanent establishment, Korean-source income may instead be taxed through withholding, subject to the applicable domestic rules and any relevant tax treaty.

6. Practical takeaway for companies entering South Korea

For most companies, the key point is straightforward:

  • A standard Korean company, including a standard foreign-owned Korean subsidiary, will generally follow the ordinary domestic corporate tax rate schedule
  • Foreign ownership by itself does not create a separate headline corporate tax rate
  • Special outcomes usually arise only where there is a specific statutory rule, such as for non-profit entities, certain real-estate-related gains, special corporate categories, or qualified FDI incentive cases
  • Foreign corporations operating directly in Korea must also consider permanent establishment and withholding tax rules

Accordingly, before relying on a general headline tax rate, companies should review not only the ordinary corporate tax brackets, but also the entity classification, local corporate income tax exposure, treaty position, and whether any special tax incentive or special rule may apply.

7. Final note

This overview is intended as a general legal and regulatory summary for 2026. The actual tax burden of a corporation in South Korea can differ depending on its legal form, business model, source of income, deductible expenses, local tax position, treaty protection, and eligibility for any tax credit, exemption, or special incentive.

For companies considering incorporation, branch registration, or foreign direct investment in Korea, it is advisable to review the structure in advance against the current Corporate Tax Act, Local Tax Act, and any applicable investment incentive provisions.