SEOUL, Nov. 15 (Korea Bizwire) — The corporate tax rate by South Korea’s top 10 conglomerates surpassed that of the United States for the first time last year, a report by a local think tank showed Wednesday.
According to the findings by the Korea Economic Research Institute (KERI), the business tax rate of the top 10 local conglomerates in terms of sales came to 21.8 percent, compared to 18.3 percent for the American conglomerates.
In terms of effective corporate tax rate, which refers to the average rate imposed on a company’s pre-tax total revenue, the rate paid by the local 10 top conglomerates was 19.5 percent, compared to 25.2 percent paid by the U.S. companies.
The institute under the Federation of Korean Industries (FKI) said the business tax rate of South Korea’s tech giant Samsung Electronics Co. was 17.9 percent compared with its U.S. rival Apple Inc.’s 17 percent.
Local business lobby groups have argued that the government should re-examine its move to increase corporate tax, saying that the move could burden companies.
Earlier, then-U.S. President-elect Donald Trump pledged a huge corporate tax cut, vowing to lower the business tax rate from 35 percent to 15 percent so that the world’s largest economy could grow again. If implemented, it would lower the U.S.’ corporate tax rate to be the third lowest among advanced economies. Switzerland’s rate stands at 8.5 percent with Ireland’s at 12.5 percent.