South Korea



    In South Korea, companies must meet certain annual requirements to maintain their legal status and comply with local regulations. These requirements may include filing annual financial statements, paying south korea corporate taxes, and holding annual shareholder meetings.

    South Korea Annual Compliances


    Corporate Tax Filing (Mandatory)

    The company’s taxable income is imposed with corporate income tax as specified by the National Tax Guideline in South Korea.

    For South Korean resident corporations, the company will be taxed on their income from outside and inside the country.

    Meanwhile, for non-resident South Korean corporations, the company will be taxed toward its Korean-based income only.

    The deadline for the income tax report is based on the fiscal year specified in the company’s Article of Incorporation. However, the fiscal-year date cannot exceed 12 months. The fiscal year extends from January 1st to December 31st.

    Quarterly VAT Filing (Mandatory)

    All South Korean incorporated companies must file periodic VAT returns detailing all taxable supplies (sales) and inputs (costs).

    The VAT filing return deadline in Korea is 25 days from the period’s end, and any associated VAT liability must also be paid by this deadline. In the event, the company has a tax credit (where the VAT incurred by the company exceeds the VAT charged on its sales in the reporting period), approved credits will be paid over to the company within 30 days of the return deadline.

    Annual Audit (exemptions applicable)

    A limited company (Yuhan Hoesa) is subjected to an external audit if the company meets 2 out of 3 conditions as follows:

    • total assets more than KRW12 billion (US$8million)
    • total liabilities more than KRW7 billion (US$5million)
    • revenues are more than KRW10 billion (US$7million)

    To comply with the external audit, the company must appoint an external auditor from any certified Korean Public Accounting Firm.

    You can search for certified Korean Public Accounting Firms at The Korean Institute of Certified Public Accountants (KICPA) official website.

    The report from the external audit done by the appointed auditor must be submitted to the Financial Supervisory Service.

    Failure to report to the authority will lead to penalties for the company.

    Payroll and Employment Tax (Mandatory for a company with Employees)

    Every company that hires employees must withhold and pay monthly income taxes to the district tax office.

    To determine the employee’s overall tax liability in South Korea, the employer should also file a year-end tax settlement by the end of January of the following year or the month the employee retires.

    An employer must also contribute to the Social Security Contributions mandated by the government.

    The Social Security Contributions are mainly:

    • National Pension (NP)
    • National Health Insurance (NHI),
    • Worker’s Compensation Insurance (WCI)
    • Employment Insurance (EI)

    Each type of social security contribution has different rates and requirements depending on the employee’s nationality.


    Accounting and bookkeeping are essential functions in any business and are particularly important in South Korea, where strict financial reporting standards and tax laws apply. These functions involve systematically recording, classifying, and analyzing financial transactions to provide accurate and up-to-date information on a company’s financial position, performance, and cash flow.

    In South Korea, accounting and bookkeeping are typically performed by trained professionals, such as certified public accountants (CPAs) or accounting firms. These professionals are responsible for maintaining accurate and complete financial records, preparing financial statements, and ensuring compliance with local regulations.

    One of the key responsibilities of accounting and bookkeeping professionals in South Korea is to maintain accurate and complete financial records. This involves tracking all financial transactions, including income, expenses, assets, and liabilities, and properly recording them in the company’s books.

    In South Korea, financial records must be kept by generally accepted accounting principles (GAAP), which provide guidelines for the proper recognition and measurement of financial transactions. Another important aspect of accounting and bookkeeping in South Korea is the preparation of financial statements.

    Financial statements are formal reports that provide information on a company’s financial position, performance, and cash flow. In South Korea, financial statements must be prepared by GAAP and must be audited by a CPA unless exempted. The three primary financial statements that are required in South Korea are the balance sheet, income statement, and cash flow statement.

    In addition to maintaining financial records and preparing financial statements, accounting and bookkeeping professionals in South Korea also have a role in tax compliance. This includes calculating and paying corporate taxes and preparing and filing tax returns. 

    Overall, accounting and bookkeeping are critical in South Korea, as they provide accurate and up-to-date information on a company’s financial position and performance and help ensure compliance with local regulations. By relying on the expertise of trained professionals, businesses in South Korea can ensure that their financial records are accurate and complete and can make informed decisions about their operations.

    Relin Consultants is a provider of accounting services and book-keeping services in Asia Pacific. 


    Accounting and Tax Services

    • Record Keeping: Relin Consultants help businesses manage accurate and well-organized financial records by helping them record transactions, control accounts payable and receivable, and keep track of financial paperwork.
    • Filing of Corporate Income Tax Return:  In order to ensure that the company complies with all applicable tax laws and regulations in South Korea, we prepare and submit the corporate income tax return on its behalf.
    • Financial Report for Head Office: Companies with a head office outside of South Korea might need particular financial reporting for that location. We prepare these reports, offering thorough and precise financial data for the head office’s reporting and decision-making needs.
    • Strategic Tax Planning: We provide strategic tax planning services to businesses to help them reduce their tax obligations while remaining compliant with South Korean tax rules and regulations. We evaluate the company’s financial standing and make suggestions for tax reduction.
    • Filing of Individual Income Tax Return: To ensure compliance with South Korean tax rules and regulations, Relin Consultants helps employees prepare and file their individual income tax returns.

    Payroll & HR Outsourcing Services

    • Monthly Payroll Services: Relin Consultants oversee the company’s payroll process on a monthly basis, which includes determining employee salaries, deducting taxes and social insurance contributions, and generating payslips. We make sure that employees are paid accurately and on time.
    • Social Insurance Services: We manage social insurance programs like health insurance, pensions, and employment insurance while guaranteeing compliance with all applicable laws.
    • Year-end Tax Settlement Service: Year-end Tax Settlement Service: At the end of the fiscal year, Relin Consultants offers year-end tax settlement assistance, ensuring that all tax obligations are met and the required paperwork is delivered to the tax authorities.
    • Cash Management: By keeping track of cash inputs and outflows, creating cash flow statements, and making suggestions for good cash management, we assist businesses in managing their cash flow effectively.

    Audit & Attest services

    • Statutory Audit: Relin consultants conduct required audits of financial statements to confirm compliance with regulatory and accounting standards. These audits provide verification of the authenticity and accuracy of financial data.
    • Special Purpose Audit: Our team carries out audits that are specifically designed to achieve particular goals, such as forensic audits, audits required by standards that are industry-specific, and due diligence for mergers and acquisitions.
    • Due Diligence: In order to identify potential risks, liabilities, and possibilities, particularly in the context of mergers, acquisitions, or investments, we thoroughly examine and analyze a company’s financial and operational aspects.


    • Compared to keeping an internal accounting team, outsourcing accounting services can result in cost savings. Companies can save money by outsourcing by avoiding expenses such as office space, training, salaries, benefits, and the purchase of software and technology.
    • Businesses can spend less money on specialized accounting services while concentrating on their primary business tasks, such as product development, marketing, and customer support.
    • Businesses can also acquire specialist knowledge and skills in South Korean accounting standards, tax legislation, and financial reporting requirements through outsourcing.
    • Accounting service providers have easy access to modern technologies and systems, which enables them to improve operations, increase accuracy, and boost productivity. Companies can benefit from these advanced systems through outsourcing without having to make expensive hardware or software infrastructure investments.
    • Professional accountants in South Korea have a thorough awareness of the intricacies of regional accounting rules and practices. Due to their experience and skill set, they can guarantee lowering the chance of mistakes, fines, and legal issues.

    Relin Consultants is a provider of accounting services and book-keeping services in Asia Pacific. 


    What is a Yuhan Hoesa?

    A Yuhan Hoesa is also referred to as a limited company. The structure was introduced in 2012 with the amendments made to the Korean Commercial Code(“Amended KCC”). The objective was mainly to attract foreign investors by offering more flexibility in operation, management, and governance structures. Yuhan Hoesa does not have a minimum capital requirement and there is no restriction on the total number of shareholders.

    Do South Korean companies have annual reports?

    Yes, all South Korean companies must prepare annual reports. Certain companies are exempted from preparing audited annual reports. Irrespective, all companies must prepare annual reports.

    What is the tax year in South Korea?

    The tax year in South Korea is the calendar year. 1st January to 31st December.

    Are annual reports mandatory in South Korea?

    Yes, it is mandatory to either prepare an audited or unaudited annual report in South Korea.

    What happens if you don't file an annual report in South Korea?

    In South Korea, failure to file an annual report can result in various consequences, including fines, penalties, and potential legal action. The consequences will depend on the specific requirements and circumstances of the company.

    One potential consequence of failing to file an annual report in South Korea is the imposition of fines or penalties. In South Korea, companies that fail to file required reports or pay required fees may be subject to fines or other penalties, which can be substantial. The relevant government agency or regulatory body typically imposes these fines and penalties.

    Another potential consequence of failing to file an annual report in South Korea is the suspension or revocation of the company’s legal status. In some cases, if a company fails to meet its annual reporting requirements, the government may suspend or revoke the company’s legal status, which can have serious consequences for the company’s operations.

    Finally, failing to file an annual report in South Korea can also result in legal action, including the possibility of criminal charges being filed against the company or its directors. In cases where the failure to file an annual report is deemed to be intentional or fraudulent, the company and its directors may be held liable under the law.

    Overall, it is important for companies in South Korea to be aware of their annual reporting requirements and to ensure that they comply with them. Failure to do so can result in serious consequences for the company and its directors.

    What are the requirements for outsourcing accounting services in South Korea?

    In South Korea, there are no particular requirements for outsourcing accounting services. However, picking a reliable accounting service provider with knowledge of regional laws and accounting procedures would be beneficial.

    How much do accounting services cost in South Korea?

    The price of accounting services in South Korea may differ based on the extent of the services, the size of the company, and the complexity of the accounting requirements.

    Can accounting service providers in South Korea handle multi-currency transactions?

    Yes, South Korean accounting service providers have experience managing transactions involving many currencies. They can help with accurate currency conversion and maintaining the records for financial transactions involving multiple currencies.

    How long does it take to complete the corporate income tax return filing in South Korea?

    The company’s income tax return must be filed by March 31 of the following year. However, depending on the complexity of the business’s finances and the effectiveness of the accounting service provider, the actual amount of time needed to complete the filing procedure can change.

    What documents are required for outsourcing payroll services in South Korea?

    Companies often need to supply employee information, such as employee contracts, salary data, social insurance details, and any relevant tax paperwork, when outsourcing payroll services in South Korea. Depending on the company providing the payroll service, the particular requirements could change.

    How frequently should financial reports be prepared for the head office?

    Depending on the needs of the business, the frequency of financial reporting to the head office may change. Financial reports are typically prepared weekly, quarterly, or annually. The organization and the accounting service provider should come to an agreement on the precise reporting frequency.

    Can accounting service providers in South Korea help with tax planning and optimization?

    Yes, tax planning services are frequently provided by accounting firms in South Korea to assist businesses in optimizing their tax strategies. They perform a financial analysis of the business, look for potential tax advantages, and make suggestions for legal tax optimization.

    What qualifications should I look for in an accounting service provider in South Korea?

    It’s crucial to take their credentials and qualifications into account when choosing an accounting service provider in South Korea. Search for service providers who possess the necessary certificates, such as Certified Tax Accountant (CTA) or Certified Public Accountant (CPA) credentials.


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