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Korea's Total Corporate Tax Weight 2nd Highest in OECD
2nd Highest Taxes
Korea's Total Corporate Tax Weight 2nd Highest in OECD
  • By Cho Jin-young
  • February 9, 2015, 05:16
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The headquarters building of Korea's National Tax Service.
The headquarters building of Korea's National Tax Service.

 

The weight of the corporate tax amount in the national total tax is the second highest among Organization for Economic Cooperation and Development (OECD) nations in 2013.

The portion of corporate tax amount in gross domestic product (GDP) ranked at a top level among OECD countries. However, the individual income tax amount compared to the total tax and GDP remained in the lower ranks.

According to the OECD on Feb. 8, Korea's corporate tax amount compared to the national total tax in 2013 was 14.0 percent, the second highest among 27 investigated member countries following Norway (20.9 percent).

Although the corporate tax amount was 13.9 percent in 2010 and increased to 15.5 percent in 2011, it dropped to 14.9 percent in 2012 and 14.0 in 2013. All of these rates, however, are higher than the average of 8.3 percent in the OECD.

As of 2013, Korea was followed by New Zealand (13.8 percent), Luxembourg (12.4 percent), and Israel (11.1 percent). The U.S., U.K., and Germany recorded 9.0 percent, 7.7 percent, and 5.0 percent respectively. Japan wasn't included in the comparison, but recorded 12.5 percent in 2012.

The corporate tax weight in GDP recorded 3.4 percent in 2013, fifth highest among 28 countries. Norway ranked first with 8.5 percent, followed by Luxembourg (4.9 percent), New Zealand (4.4 percent), and Japan (3.9 percent).

On the other hand, Korea's income amount compared to the total tax in 2013 was 15.4 percent, which ranked 22nd among 27 investigated countries, which was lower than an average 23.5 percent of OECD countries and didn't even reach a third of the highest rate of Denmark (54.3 percent) and half of the U.S. (38.6 percent).

The income tax weight in the national total tax gradually increased from 14.2 percent in 2009, 14.3 percent in 2010, and 14.8 percent in 2011 to 15 percent in 2012.

The income tax amount compared to the national GDP (3.7 percent) in 2013 was so low that it ranked 26th among 28 countries. It was much lower than the average of the OECD (9.0 percent), and it reached a seventh of Denmark (26.4 percent), which had the highest record. The US was 9.8 percent, Germany 9.6 percent, France 8.4 percent, and Japan 8.4 percent, respectively.