The Ministry of Economy and Finance (MOEF) announced on December 23, 2022, that the 2022 tax reform bill was passed at the plenary session of the national assembly. Accordingly, there are notable changes that the foreign-invested companies may be interested in, as indicated below.

○ Key contents related to the Restriction of Special Taxation Act among the tax reform proposals

- Expand the special application period for the flat tax rate (19%) for foreign workers

* (As-is) 5 years from the start date of work in Korea → (To-be) 20 years from the start date of work in Korea

- Newly introduce income and corporate tax reduction for companies that start a business or establish a new business site in the Saemangeum investment promotion zone

* Reduction rate: 100% for 3 years, 50% for the next 2 years

* This new provision will be applicable from companies that start a business or establish a new business site in the Saemangeum investment promotion zone after January 1, 2023. (The application period of this tax credit is up to December 31, 2025.)

For more details, please visit the website of the ministry, www.moef.go.kr