Corporate Tax Interim Payment for December Year-End Companies (Deadline: August 31)

Hello everyone! As we approach the end of August, it is important for December year-end companies to remain mindful of the corporate tax interim payment. Below is a structured overview of the key requirements.

🔎 What is the interim payment?

Corporate tax is not paid only once a year—it can be split into two installments. This system, called the interim payment, helps distribute the tax burden for companies while supporting stable national finances.

For December year-end companies, taxes for January to June performance must be filed and paid by August 31.

✅ Who is required to make the interim payment?

The following are generally subject to the interim payment obligation:

• Domestic (for-profit) corporations including foreign invested companies
• Non-profit corporations engaging in revenue-generating activities
• Foreign corporations with a fixed place of business in Korea

✅ Exemptions

Certain corporations are exempt from interim payment, including:

• SMEs with less than KRW 500,000 corporate tax liability in the previous year
• Newly established corporations (except in cases of mergers or splits)
• Corporations with no first-half performance or currently inactive
• Corporations with a business period of six months or less
• Corporations undergoing liquidation
• Foreign corporations without a domestic establishment

💰 How to calculate the tax payable

Two calculation methods are available:

1. 1. Based on previous year’s tax (Calculated tax from prior year – deductions/exemptions) × 50%
2. 2. Based on first-half performance (provisional method) (Taxable income for the first half × 2) × tax rate × 6/12 – first-half deductions/exemptions

👉 Companies may choose the method that is more advantageous to them.

📝 Installment payment option

If the tax due is significant, installment payment is allowed:

• ≤ KRW 10 million → full payment at once
• KRW 10–20 million → excess amount may be paid in installments
• KRW 20 million → up to 50% may be paid in installments

Installment deadlines:

• General corporations: within 1 month after due date
• SMEs: within 2 months after due date

⚠️ Penalties for late filing or payment

• Non-filing penalty: 20% of the tax due
• Late payment penalty: 0.022% of unpaid tax per day

Failure to comply with the filing and payment deadlines can result in unnecessary penalties and financial burden.

✍️ Summary

• Applicable to: December year-end companies
• Deadline: August 31, 2025 (automatically extended to September 1, 2025)
• Key action: Review applicability, determine the most beneficial calculation method, and complete filing and payment within the deadline.

For professional assistance with tax calculation, filing, or compliance review, please contact Beyul Accounting Corporation. Our team is available to provide comprehensive support to ensure timely and accurate compliance.