920,000 Corporations to File and Pay Local Income Tax by the End of April

COVID-19 Gathering Ban and Business Restriction Targeted SMEs Receive Automatic 3-Month Payment Deadline Extension

[Asia Economy Reporter Lim Cheol-young] The filing and payment of corporate local income tax, a local tax paid to local governments, will take place in April.

On the 28th, the Ministry of the Interior and Safety announced that about 920,000 corporations with December fiscal year-end, accounting for 96% of all corporations, must file and pay corporate local income tax by April 30.

Corporations can file electronically through WETAX, the nationwide local tax filing and payment system, or file by mail or visit the relevant city, county, or district office as of the business year-end date. Corporations with business sites in two or more cities, counties, or districts must file the corporate local income tax calculated according to the apportionment rate for each business site separately to the local government where each business site is located.

However, to support small and medium-sized enterprises (SMEs) affected by COVID-19, all local governments will extend the payment deadline ex officio. The ex officio extension applies to SMEs in industries subject to gathering bans or business restrictions due to COVID-19 quarantine measures, and SMEs located in employment crisis areas or special industrial crisis response areas that received an ex officio extension of the national corporate tax payment deadline this year. The extension period is three months.

Even companies eligible for the ex officio extension must file within the filing deadline. A significant change in this year's corporate local income tax filing due to last year's revision of the Local Tax Act is that companies can deduct taxes paid abroad from the tax base.

Previously, foreign corporate taxes were only deducted from the national corporate tax, but starting this year, they can also be deducted from the corporate local income tax tax base, which is expected to greatly reduce the double taxation burden on companies. Corporations that deduct foreign corporate taxes must also submit a statement of deduction of foreign corporate tax from the tax base to the city, county, or district office with jurisdiction over their tax payment location.

Park Jae-min, Director of the Local Finance and Economy Office, said, “We ask for cooperation to file and pay the corporate local income tax within the deadline,” and added, “The Ministry of the Interior and Safety will continue to support struggling SMEs and listen to companies’ voices for the rational improvement of local tax systems.”

This content was produced with the assistance of AI translation services.