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2022 Tax Revision Bill

  • DivisionTax and Customs Office - Tax Policy Division
  • DateJuly 21, 2022
  • Tel+82 44 215 4110

2022 Tax Revision Bill


2022 Revision Bill to Boost the Economy and Stabilize People’s Livelihood


2022 Tax Revision Framework


The government has drawn up the 2022 tax revision bill, focusing on the following directions.

- Stimulate economic activities through tax revision that ensures rationalization

Stabilize people’s livelihood through optimizing of tax burdens

- Strengthen the tax system by improving fiscal sustainability and tax fairness

- Enhance a taxpayer-friendly environment by increasing taxpayer convenience


The 2022 tax revision is aimed to increase the dynamism of key economic players including the private sector, businesses and markets and stabilize people’s livelihood, to that end, the four key policies are to be carried out as follows.


1. Stimulate economic activities through tax revision that ensures rationalization


1-1. Promote corporate competitiveness 

1) Revise corporate tax rates and tax brackets

Lower the top corporate tax rates to 22 percent from 25 percent and simplify the tax bracket to 2-3 from 4 brackets

2) Eliminate double taxation on dividend income for foreign and domestic subsidiaries

3) Raise the tax deduction limit for loss carryforwards to 80 percent from 60 percent for corporations to support the pandemic-hit businesses and to optimize tax burdens

4) Sunset the regulatory Special Taxation for Investment and Facilitation of Mutually Beneficial Cooperation by the end of 2022

5) Rationalize taxation on intra-group transactions

6) Relax the parent companies’ ownership share of their subsidiaries to more than 90 percent from 100 percent to raise the effectiveness of consolidated tax return

7) Extend the patent period for duty-free shops to 10 years from 5 years and allow all entities, whether large or small/medium-sized, to renew their patents up to 2 times


1-2. Strengthen tax support for employment and investment



1) Introduce a simplified tax credit scheme by integrating 5 employment tax credits with a focus on employment growth tax credit

- Adjust the age range of ‘young people’ to 15-34 from the current 15-29

- Expand employment assistance for those who convert to a full-time position, women with career breaks, and those who return to work after childcare

2) Enhance incentives to attract foreign talents

- Lift the period limit of the 19 percent flat income tax rate applicable to foreign workers

- Extend the income tax reduction (50 percent) period to 10 years from 5 years for foreign engineers

- Extend the income tax reduction (50 percent) period to 10 years from 5 years for Korean talents relocating or returning to Korea and extend the applicable date to the end of December 2025



1) Provide tax incentives for developing national strategic technologies 

- Increase the tax credit rate for large enterprises’ facilities investment on developing national strategic technologies to 8 percent (amount equivalent to medium-sized enterprises)

- Increase tax credit rate for medium-sized enterprises’ facilities investment equivalent to 50 percent (general: 5%, technology for new growthsource technology: 6%) of the rate for SMEs

2) Relax the criteria on support for companies reshoring to Korea

- Extend the applicable tax reduction period to 3 years from 2 years for establishing manufacturing facilities relocating or returning to Korea after closing offshore facilities

3) Extend tax exemption for video content productions by 3 years and add expenses spent for producing Over-the-Top (OTT) service content to the lists subject to tax credits


Start-ups and ventures

1) Increase tax benefits for stock options

- Significantly raise a tax exemption limit on incomes earned from the exercise of stock options to 200 million won from 50 million won and introduce an accumulated exemption ceiling up to 500 million won

- Allow employees of KOSPI and KOSDAQ-listed venture companies to make an installment payment of the income taxes for the exercise of stock options for up to 5 years

2) Extend the period applicable for the special taxation for investment in start-ups and ventures by 3 years


1-3. Support for family business succession

1) Raise the effectiveness of inheritance deduction for the family business

- Ease the eligibility for application of inheritance deduction for the family business to companies with less than 1 trillion won in revenue from those with 0.4 trillion won in revenue

- Increase the deduction amount limit for up to 100 billion won from 50 billion won for businesses that have operated for more than 30 years (10 to 20 year-old companies: 20 billion won → 40 billion won) and 20 to 30 year-old

companies: 30 billion won → 60 billion won)

2) Expand the amount applicable for special case concerning gift tax imposition

- Ease special taxation restrictions by expanding the amount applicable for reduction or exemption to 100 billion won from 10 billion won as well as the types of businesses and post management period

3) Introduce deferment of payment of inheritance or gift tax in family business succession

- Provide choices over the deduction for the inheritance of family business, special taxation of gift tax (medium-sized enterprises and SMEs), or deferment of payment (SMEs)

4) Introduce a yearly installment payment in inheritance of a family business and extend the grace period for up to 10 years from 5 years for all medium-sized enterprises and SMEs. 

5) Rationalize the succession deduction system of agriculture, forestry and fishery businesses

- Increase the amount applicable for deduction to 3 billion won from 2 billion won, but strengthen the eligibility requirement of the inheritor

6) Rationalize the stock premium valuation for the largest shareholder

- Withdraw the 20 percent stock premium valuation excluding the stocks issued by enterprise groups subject to limitations on mutual investment under the Monopoly Regulation and Fair Trade Act


1-4. Promote financial market

1) Postpone the introduction of income tax on financial investment by 2 years until 2025, considering the recent stock market situations and the progress of the investor protection system

2) Relax the standards for the majority shareholder for capital gains tax in the listed companies in Korea

- Increase the majority shareholder’s stockholding limit to 10 billion won per stocks

3) Reduce securities transaction taxes for shares listed on the KOSPI and KOSDAQ to 0.20%  from the current 0.23% in 2023

4) Postpone the introduction of income tax on virtual assets transactions by 2 years until 2025, considering the recent cryptocurrency market situations and the progress of investors protection system

5) Introduce separate taxation on interest income (14 percent) from investment on KTBs issued for individual purchase

6) Build investment infrastructures to meet international standards by exempting income tax and corporate tax on interest income and capital gains derived from non-residents and foreign corporations’ investment in KTBs and monetary stabilization bonds


2. Stabilize people’s livelihood through optimizing of tax burdens


2-1. Work to minimize the tax burden on the people

1) Adjust the tax base and amount of tax credit for wage and salary income

- Raise the two lowest tax base sections to minimize the tax burden on low and middle income households

Reduce the deduction amount of tax credit for wage and salary income for employees with total income exceeding 120 million won to 200,000 won from 500,000 won

2) Raise the non-taxable meal benefits to 200,000 won per month from 100,000 won per month to minimize the food expense burden

3) Ease the eligibility for application of EITC (Earned Income Tax Credit) and CTC (Child Tax credit)

- Make applicable to households with less than 240 million won in total assets and raise the maximum payment amount by 10 percent from the current level

4) Reduce the housing expenses burdens

- Increase the tax deduction rate of monthly rent paid for the person not owning a house to up to 15 percent from up to 12 percent

- Increase the income deduction limit of repaying the principle of the house lease loan to 4 million won from 3 million won

5) Increase tax support for education and childcare

6) Expand income deduction for credit card spending

7) Expand tax support for pension accounts by increasing the contribution limit applicable for the tax credit   


2-2. Support for micro enterprises and SMEs

1) Extend the period applicable for tax credits for the amount discounted from commercial building rent by the end of 2023

2) Extend the period applicable for special tax reduction for small and medium enterprises for another 3 years  

3) Extend the special case for micro enterprises to provide exemption from additional tax for amount in arrears and allow installment payment of delinquent tax for maximum of 5 years

4) Extend tax credits for contributions to funds for collaborative cooperation by 3 years to continue to support mutual cooperation between large and small/medium-sized enterprises


2-3. Strengthen regionally balanced development

1) Revise a tax support system for companies relocating to rural or less developed areas from Seoul Metropolitan Area

- Extend the period applicable for special tax provisions for companies relocating to rural or less developed areas by 3 years

- Significantly increase tax benefits for companies relocating their headquarters or manufacturing facilities to at-risk labor and industrial areas


2-4. Normalize the taxation on real estate

1) Adjust taxation rates for housing in the comprehensive real estate holding tax and upper ceiling of the tax burden

- Apply price-based taxation instead of number of the houses owned and adjust the tax rates

Set the ceiling of the tax burden at 150 percent regardless of the number of houses possessed

2) Increase the basic deduction amount for housing in the comprehensive real estate holding tax

- Impose a comprehensive real estate holding tax on housing exceeding the price of 900 million won for multi homeowners from 2023

- Impose a comprehensive real estate holding tax on housing exceeding the price of 1.2 billion won for single-home owners from 2023

3) Introduce a 300 million won additional special deduction in addition to the basic 1.1 billion won deduction on comprehensive real estate holding tax for single-home owners temporarily in 2022

4) Introduce a special case in comprehensive real estate holding tax on calculating the number of housing to be applicable for a single-home owner

- Exclude temporary two houses, inherited houses and low-priced houses in rural areas in calculating the houses in applying for a single-home owner[1] status


3. Strengthen tax system by improving fiscal sustainability and tax fairness


3-1. Prepare measures to identify income and secure tax revenue

1) Require monthly submission of simplified payment statements for regular labor income and temporary income

2) Require compulsory issuance of electronic invoices to sole-proprietor whose annual sales exceed 80 million won effective from July 2024 (apply to annual sales exceeding 100 million won from July 2023)

3) Include 13 businesses types to the current 112 businesses types under requirement of electronic invoices issuance including department stores, hypermarkets and automotive dealership brokerage firms

4) Revise unnecessary non-taxation and tax exemption schemes

- Sunset 10 clauses among those reaching dismissal date in 2022


3-2. Prevent tax avoidance with stricter rules

1) Rationalize inheritance tax method on designated cultural heritages

2) Rationalize capital gains tax carried forward

- Extend the period applicable tax carried forward to 10 years from 5 year in the case of inheritance between special relationships

3) Require compulsory automobile insurance to sole-proprietors

- Prevent overuse of vehicles for private purposes by tightening measures from 2024


3-3. Introduce a global corporate minimum tax system

1) Introduce a global corporate minimum tax system[2] through a global agreement with an aim to address issues related to tax avoidance by multinational corporations at a time when the global economy is increasingly digitalized


4. Enhance a taxpayer-friendly environment by increasing taxpayer convenience


4-1. Work to protect taxpayers’ rights

1) Expand grounds qualified for the issuance of corrected import tax invoice

2) Ease the eligibilities for requesting correction for comprehensive real-estate holding tax

3) Extend the application period for refund of customs levied on raw material for export from 2 years to 5 years from the date declaration has been accepted


4-2. Enhance taxpayer convenience

1) Raise the limit on duty-free allowance for inbound travelers to 800 dollars[3] per person from 600 dollars as well as duty-free purchase limit for alcohol to two bottles (2 liters or under) of alcohol from one bottle (1 liter or under) and apply equal measures for the designated duty-free shops in Jeju Island

2) Rationalize the legal deadline for stamp taxes and revise the late payment penalty

3) Expand the amount applicable for exemption from compulsory interim payment of tax for SMEs to less than 500 thousand won from less than 300 thousand won

4) Abolish simplified tax rate in order to streamline customs procedures for inbound travelers’ belongings and encourage the use of an electronic reporting system via mobile devices

4. Expected revenues


Revenues are expected to drop by around 13.1 trillion won over the next five years due to the revision. By year, the revision had the most effects on 2024 with the revenues for the year expected to fall by 7.3 trillion won. By item, the expected revenues from income taxes and corporate taxes dropped by 2.5 trillion won and 6.8 trillion won, respectively, which in turn accounts for 71% of the total effects of the revision.


Tax Revenue Increase

(trillion won)















Income tax







Corporate tax







Securities transaction tax







Comprehensive real estate holding tax















Taxpayer Burden Increase

(trillion won)






Low and middle-income households1)

High income households










1) People with incomes below 200 percent or less of the average income of gross wage workers

2) Taxpayers who are difficult to be classified into a certain category such as foreigners, non-residents and public interest corporations


5. Schedule for the revision


The tax revision requires changes in 18 Acts, and will have been submitted to the National Assembly no later than September 2.



[1] This is a legislative bill to be discussed at the provisional session of the National Assembly in August.

[2] It is expected to be implemented starting from 2024.

[3] It excludes 2 bottles of alcohol (2 liters or under, less than 400 dollars), 60ml of perfume and one carton of cigarettes under the new rule.

Please refer to the attached pdf. 

Ministry of Economy and Finance
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