Here are the South Korea statutory updates for 2025.
Effective January 2025
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
