The Ministry of Economy and Finance announced that the government finalized its 2025 tax reform proposal at a Cabinet meeting held on the 26th.
After announcing this year’s tax reform plan at the end of last month, the government finalized its proposal at today’s Cabinet meeting following inter-ministerial consultations, legislative pre-announcements, and a vice-ministerial meeting on 13 bills, including the Income Tax Act, Inheritance and Gift Tax Act, and the Comprehensive Real Estate Holding Tax Act.
Four revised bills-the Framework Act on National Taxes, National Tax Collection Act, Restriction of Special Taxation Act, and Corporate Tax Act-were partially amended to reflect opinions raised during the legislative pre-announcement and review by the Ministry of Government Legislation. These amendments include changing the calculation method for late payment penalties after the designated payment deadline to a monthly basis and revising the penalty provisions for profit and loss allocation in partnership companies.
The new tax reform plan includes a uniform 1 percentage point increase in corporate tax rates across all tax bases, tightening the criteria for major shareholders subject to capital gains tax on stock transfers from 5 billion won in holdings to 1 billion won, and lowering the securities transaction tax rate.
To encourage high dividend payouts, the government will introduce separate taxation for dividend income. The education tax rate on profits exceeding 1 trillion won for financial and insurance companies will be raised by 0.5 percentage points, from 0.5% to 1.0%. As a support measure for families with multiple children, the credit card income deduction limit will also be expanded.
The government plans to submit the 13 bills approved today to the regular National Assembly session by September 3.
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