Korean Local Tax Law Revisions for 2026

The Ministry of the Interior and Safety (MOIS) announced on August 28, 2025 the government’s Korean local tax reform bill. This will be finalized and submitted to the National Assembly in October 2025.

The local tax reform bill prioritizes four main areas: promoting balanced national development, ensuring public livelihood stability, promoting a taxpayer-friendly environment, and developing an efficient and rational taxation system.

We summarized the major proposed local tax law revisions that could be relevant to foreign-invested companies to keep you updated as below. Most of these tax law revisions we discussed below will take effect for fiscal years beginning on or after January 1, 2026, or for income earned on or after that date, unless otherwise specified.

l Extension of the advance notice period for local tax audits

The advance notice period for tax audits has been revised from the previous 15 days to 20 days prior to the commencement of the audit. In addition, a new 7-day advance notice requirement has been introduced for re-audits conducted pursuant to decisions made in pre-assessment reviews, objections, or tax appeals.

l Clarification of the correction request period during pre-assessment reviews and objections

Previously, the correction period during which a request for correction could be made was fixed at 20 days. Under the revised rule, the tax authority may now set a correction period of up to 20 days, with the possibility of a shorter period if agreed to by the taxpayer.

l Establishment of grounds for requesting deliberation in joint sessions of tax judges at the tax tribunal

A legal basis has been established to allow the Minister of the Interior and Safety to request deliberation in a joint session of all standing tax judges, presided over by the Chief Judge of the Tax Tribunal, for local tax appeal cases that have a significant impact on local governments.

l Expansion of the taxpayer advocate’s duties and authority

The taxpayer advocate’s duties have been expanded to include support for taxpayers during the pre-assessment review and objection process. In addition, the taxpayer advocate is now authorized to participate in and submit opinions during deliberations of the Local Tax Review Committee when it examines and decides on such cases. These changes aim to strengthen the taxpayer protection system by enhancing the role and authority of the taxpayer advocate, while also promoting greater objectivity in the tax relief process and reinforcing the protection of taxpayer rights.

l Increase in applicable local corporate income tax rates

The local tax reform bill proposes a 0.1 percentage point increase in the marginal tax rate across all local corporate income tax brackets, restoring the rates to the levels that were in effect before the 2023 reduction.