South Korea to give mid-sized companies lower tax rate

South Korea to give mid-sized companies lower tax rate

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The South Korean government intends to reduce the top marginal corporate tax rate from 22% to 20% in 2012 for businesses with a taxable income of between W200 million ($178,000) and W50 billion ($45 million), in a welcome move for SMEs.

For companies with a tax base of over W50 billion, the present 22% rate, with an effective rate of 24.2% including resident surtax, will continue to apply.

The creation of a new middle tax bracket is intended to increase financial stability and offer greater benefits to SMEs.

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