Corporate Tax Rate to be Lowered in 2005

The corporate tax rate will be lowered by 1-2 percent (varies according to the tax base) starting in 2005.

The finance and economy committee of the Parliament has formed a sub-committee to examine the revised corporate tax law, submitted by Na Oh-yeon of Grand National Party (GNP), on November 20. As a result, there was a provisional agreement to reduce the corporate tax rate of the companies with a tax base of less than 100 million won to 13 percent from the current 15 percent and to 26 percent from 27 percent for companies with a tax base of more than 100 million won.

However, considering the government’s tax revenue, the finance and economy committee decided to put the law into operation starting in January 2005, a year after January 1 of next year, as originally suggested by the GNP.

Min-Hyuk Park mhpark@donga.com