South Korea's effective corporate tax rate is the 9th highest in the OECD, surpassing even China's

A survey by the Korea Employers Federation revealed that South Korea's corporate tax burden and the rate of increase are among the highest among member countries of the Organization for Economic Cooperation and Development (OECD).
According to a report titled "International Comparison and Implications of Effective Corporate Tax Rates (Effective Tax Rates)" released by the association on the 23rd, the Korean corporation
The effective tax rate was 24.9%, the 9th highest among the 38 OECD countries. The effective tax rate is calculated by comprehensively considering the nominal maximum tax rate (including local taxes), various deduction systems, and macro indicators such as prices and interest rates.
The OECD average was 21.9%, and the G7 average was 24.1%, both of which were lower than South Korea.
The country has exceeded the OECD and G7 averages for six consecutive years since 2018. OECD countries with higher effective tax rates than South Korea are Colombia (32.9%), Australia (28.5%), and Poland (28.5%).
The top three countries were Portugal (28.4%), Japan (28.4%), Costa Rica (28.2%), Mexico (27.6%), New Zealand (27.0%), and Germany (26.6%).
Korea's effective tax rate was also higher than that of non-OECD countries such as China (23.0%), India (24.0%), and Singapore (16.1%).
When applying the current inflation rate and real interest rate, South Korea's effective corporate tax rate fell slightly to 24.2%, ranking 11th in the OECD.
Furthermore, South Korea's effective corporate tax rate has increased by the third largest amount in the OECD over the past six years.
Compared to 2017, South Korea's effective tax rate increased by 1.9 percentage points, the third highest after the UK (4.7 percentage points) and Turkey (4.5 percentage points).
During this period, 10 OECD member countries, including South Korea, saw their effective tax rates increase, 21 countries saw their effective tax rates decrease, and seven countries saw their effective tax rates remain the same.
As a result, South Korea, which ranked 19th in the OECD in 2017, rose to 12th in 2018, 11th in 2019, and 10th in 2020, and has maintained its 9th place since 2021.
Ha Sang-woo, head of the association's economic research bureau, said, "Amid concerns that domestic investment will slow down due to stricter labor regulations and increased foreign investment, raising the corporate tax rate needs to be carefully considered."
"There is a need to improve the tax environment," he said, calling on the government and the Diet to proactively promote the creation of a tax environment at the same level as competitive countries.