Overview

• The government and ruling Democratic Party agreed on July 29 to raise the top corporate tax rate from 24% back to 25%, reversing Yoon Suk Yeol’s 2022 cut.
• Cabinet and DP policy consultations also approved lowering the capital gains tax threshold for major shareholders from 5 billion won to 1 billion won.
• Corporate tax revenue has fallen from a 103.6 trillion won peak in 2022 to 62.5 trillion won last year, prompting supplementary budgets heavily funded by bond issuance.
• The opposition People Power Party warns the hikes will further burden firms already facing U.S. duties on autos, steel and potential semiconductor tariffs.
• Parliamentary debate is set to begin this week amid ongoing ruling party discussions over separate dividend income taxation proposals.