February 1, 2023
Korea's National Assembly passes significant 2022 tax reform bills
On December 23, 2022 Korea's National Assembly passed the 2022 tax reform bills from the government with some amendments. The finalized 2022 tax reform bills outlined several significant changes, including the extension of five-year application period limitation for special taxation of foreign workers to 20 years, effective January 1, 2023. The 2022 tax reform bills also include a deferral to the introduction of financial investment income taxation category until January 1, 2025. This means a new tax would be levied on financial investment income, being income arising from the transfer of financial investment instruments such as securities, bonds, investment contracts and derivatives, effective from January 1, 2025. The 2022 tax reform bills provide for the deferral of taxation on virtual assets from January 1, 2023 to January 1, 2025. This means gains derived from the disposal of virtual assets or income earned by renting virtual assets will be categorized as "other income" and subject to income tax from January 1, 2025.
A Tax Alert prepared by EY's People Advisory Services group, and attached below, provides additional details.
Full text of Tax Alert