Here are the South Korea statutory updates for 2025.
Effective January 2025
South Korea Launches Digital Residence Card for Foreign Nationals
South Korea has introduced a digital residence card for foreign nationals, providing a secure and convenient alternative to physical cards.
Key Details:
- Who is Eligible: Registered foreign nationals aged 14 or older with permanent or overseas Korean residence cards.
- How to Apply:
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- Download the Mobile ID-card app and visit an immigration office to complete an integrated application.
- Cards are issued within two weeks.
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- Existing Cardholders:
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- Cards issued before 2025 require a QR code scan at an immigration office for digital conversion.
- Cards issued after 1 January 2025 allow direct digital downloads via smartphone chip scanning.
Source: BAL
South Korea Adjusts National Health Insurance Contribution Limits
South Korea will revise the lower and upper monthly limits for National Health Insurance (NHI) contributions starting 1 January 2025.
Key Updates:
- Maximum Monthly Compensation: Increased from KRW 119,625,106 (2024) to KRW 127,056,982 (2025).
- Maximum Monthly Premium (Employer + Employee): Increased from KRW 8,481,420 to KRW 9,008,340.
- Minimum Monthly Compensation & Premium: Remain unchanged at KRW 279,266 and KRW 19,780, respectively.
Source: Ramco
Seoul Increases Living Wage for 2025
The Seoul Metropolitan Government (SMG) has set the living wage for 2025 at KRW 11,779 per hour, a 3% increase from the 2024 rate of KRW 11,436. This equates to a monthly wage of KRW 2,461,811 for a standard 40-hour workweek.
Key Details:
- The 2025 living wage is KRW 1,749 higher than the national minimum wage of KRW 10,030 per hour.
- The living wage applies to approximately 14,000 workers, including:
- SMG employees.
- Workers in SMG-funded projects and affiliated institutions.
- Private contractors funded by the city.
- Determination was made after consultation with the SMG Living Wage Committee, considering inflation and fiscal conditions.
Source: Seoul Metropolitan Government
Korea Implements 2025 Tax Reforms
Korea has enacted the 2025 Tax Reform Bill, introducing key changes to tax laws, effective for fiscal years starting on or after 1 January 2025. Below are the key updates:
Global Minimum Tax Rules
- Deferred Tax Asset for GloBE Losses: Constituent entities may select 15% of net GloBE losses as deferred tax assets.
- Allocation Rules for Unpaid Taxes: Enhanced rules for allocating unpaid taxes to the ultimate parent entity or prior fiscal years.
- Safe Harbour Rules: Transitional provisions may reduce top-up taxes to zero for certain conditions until December 2026.
- Extended Filing Deadlines: GloBE information return filings due before 30 June 2026 are extended to that date.
Virtual Asset Taxation
- The taxation of virtual asset gains has been postponed to 1 January 2027.
R&D and Investment Tax Credits
- Extended Period: National strategic technology tax credits extended through December 2027.
- Increased Deduction Rates: Deduction rates for investments exceeding prior averages raised to 10%.
Foreign Investor Rules
- Simplified Withholding Tax Process: Foreign investors using overseas investment vehicles can submit exemptions with fewer requirements.
- Refund Claims: Foreign investors can directly claim refunds for tax exemptions on government bonds.
Korean-Sourced Personal Service Income
- Mandatory Tax Exemption Applications: Foreign individuals and corporations must submit exemption forms for Korean-sourced income starting 2026.
Withholding Tax for Foreign Athletes
- A 22% withholding tax rate will apply to foreign professional athletes, regardless of contract duration.
Source: Ernst & Young
