Korean Government Announces Corporate and Dividend Tax Incentives Under Corporate Value Up Program

• The Korean government announced corporate tax incentives for companies that actively increase capital returns to shareholders and also dividend tax incentives and as part of the Corporate Value Up program.

• For companies that provide shareholder returns, a 5% corporate tax amount on the increase will be deducted and the tax burden on increased dividends of the company will be reduced.

• For dividends under 20mn won, the tax rate will be reduced from 14% to 9%. Investor can choose lower rate (25% or comprehensive tax rate) for dividends exceeding 20mn won.

Photo by Mathew Schwartz on Unsplash

On 3 July, the Korean government announced corporate tax incentives for companies that actively increase capital returns to shareholders and also dividend tax incentives and as part of the Corporate Value Up program.

Corporate Tax Incentives

Starting 2H 2024, a corporate tax credit for the increased amount of shareholder return will also be implemented. For companies that provide shareholder returns (such as dividends and share cancellations), a 5% corporate tax amount on the increase will be deducted and the tax burden on the increased dividends of the company will be reduced. The Korean government decided to use a three year average instead of comparison to the previous year due to large annual fluctuations.