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Startup Relief · Tax Calendar · Accountants

This is general information, not legal or tax advice. Rules change often, so verify with the official source or a licensed tax accountant (semusa) or lawyer before acting.

Early-stage tax benefits are decided by when, where and in which industry you start, and the founder's age. Many of these conditions are hard to change after registration.

Startup SME Tax Reduction (Restriction of Special Taxation Act Article 6)

Item Content (per the article on the Korea Law Information Center)
Eligible SMEs founded in the industries listed in the law on or before 2027-12-31
Period The first tax year with income and the tax years ending within 4 years from the start of the following year (up to 5 tax years)
Taxes covered Income tax or corporate tax on income from that business
Youth Aged 15 to 34 at founding (check the article for details such as military service credit)

Reduction Rates for Youth Startups Founded on or after 2026-01-01

Founding location Reduction
Outside the capital region, or a depopulation area within the capital region 100%
Capital region (excluding overcrowding control areas and depopulation areas) 75%
Capital-region overcrowding control area 50%

Cases Not Treated as a "Startup"

The following may not count as a "startup" for the reduction. Confirm details with the article and a tax accountant.

flowchart TD
    A[Planning to start] --> B{Is the industry eligible}
    B -->|No| N[No reduction]
    B -->|Yes| C{Is it a genuinely new startup}
    C -->|No| N
    C -->|Yes| D{Founded on or before 2027-12-31}
    D -->|No| N
    D -->|Yes| E{Youth at founding}
    E -->|Yes| F[Check regional youth rate]
    E -->|No| G[Check general rate by region and revenue]
    F --> H[Claim the reduction when filing income or corporate tax]
    G --> H

Bad example:

We converted a sole proprietorship run for five years into a corporation and assumed the new corporation would get the startup reduction.

Good example:

Before founding, we confirmed with a tax accountant that the business address, industry code and founder's age met the requirements, and kept a record.

Tax Calendar (December year-end, January to December periods)

Month Individual general taxpayer Individual simplified taxpayer Corporation Common (with staff or freelancers)
January VAT final return (previous 2nd period) VAT final return (previous January to December, January 25) VAT final return Withholding tax, simplified statement (wages, previous second half; payments through 2026)
February Withholding tax, prepare year-end settlement, payment statements for interest, dividends and other income (end of February; includes other income such as one-off manuscript or lecture fees, excludes religious workers' income)
March Corporate tax return (March 31) Payment statements (March 10)
April Pay VAT preliminary notice VAT preliminary return or notice Withholding tax
May Global income tax return (May 31) Global income tax return (May 31) Withholding tax
June Global income tax for sincere-filing businesses (June 30) Withholding tax
July VAT final return (1st period) Pay the preliminary assessment notice (July 25). If you issued tax invoices in January to June, file a preliminary return by July 25 VAT final return Withholding tax, simplified statement (wages, first half; payments through 2026)
August Corporate tax interim prepayment (end of August) Withholding tax
September Withholding tax
October Pay VAT preliminary notice VAT preliminary return or notice Withholding tax
November Global income tax interim prepayment (end of November) Global income tax interim prepayment (end of November) Withholding tax
December Review next year's plan Check next year's taxpayer type (whether a July 1 switch applies) Withholding tax

When You Need a Tax Accountant

Signal Why
Considering incorporation or conversion Tax is decided at the design stage
Overseas revenue grows Zero-rate requirements and evidence
You become a double-entry bookkeeper Financial statements and business account management
First employee Payroll, social insurance, year-end settlement
Claiming startup reductions or credits Checking requirements and application documents
The tax office asks for an explanation Response deadline and approach

What you can do yourself: business registration, simple bookkeeping, straightforward VAT returns, withholding tax returns. What is better delegated: corporate tax returns, applying reductions, global income tax needing adjustments, tax audit responses.

References