Korea: 2025 tax reform proposal, including introduction of domestic minimum top-up tax
Proposal expected to be introduced to National Assembly by September 3, 2025, and approved by the end of the year
The Ministry of Economy and Finance (MOEF) on July 31, 2025, announced the "2025 Tax Reform Proposal” for consultation from August 1, 2025, to August 14, 2025.
The proposal includes the following provisions:
- 1% increase in corporate tax rates, thereby restoring the rates to 2022 levels
- Introduction of a filing obligation for entitlement to reduced tax rate for nonresidents and foreign corporations
- Rationalization of the integrated employment tax credit
- Expansion of research and development (R&D) and integrated investment tax credits for national strategic technologies
- Additional documentation requirement for refund claims following arm’s length price adjustments
- Introduction of domestic minimum top-up tax (DMTT) to apply in priority to the existing income inclusion rule (IIR) and undertaxed profit rule (UTPR) already in effect
- Restoration of securities transaction tax rates
- Restoration of capital gains tax threshold for controlling shareholders
The proposal is expected to be submitted to the National Assembly for consideration by September 3, 2025, and the details of the proposal are subject to change during the legislative process before its expected approval by the National Assembly by the end of year.
Read an August 2025 report prepared by the KPMG member firm in Korea
In addition, for a detailed discussion of the DMTT proposal, read an August 2025 report prepared by the KPMG member firm in Korea