[Tax] 2025 Tax Reform Plan Finalized by the State Council

The government has finalized its 2025 tax reform plan. This reform focuses on corporate investment, employment, and strengthening the competitiveness of future industries. In addition to existing national strategic technologies such as semiconductors, secondary batteries, and hydrogen, AI technology has been included as a strategic field, and tax credits for research and development and facility investment will be expanded. Other key changes include an extension of the tax reduction program for the domestic return of overseas AI talent, the introduction of tax support for companies that maintain employment, and stronger incentives for reshoring companies and those relocating to provincial areas. Added to this are separate taxation for high-dividend companies and tax support for content industries such as webtoons and video, establishing a comprehensive foundation for growth spanning everything from advanced industries to cultural content.

Effective September 1, 2025, the Korea Customs Service's "batch submission system for dutiable value declaration data" will take effect. This reform focuses on reducing the burden of repeatedly submitting tax data while enhancing the accuracy of declarations. Companies participating in AEO or ACVA programs and small importers with annual revenue under 500 million won are exempt from data submission, and transactions under identical conditions need only submit data once a year. The items required for tax-data submission are also clearly limited to eight categories, including royalties and fees. Before preparing excessive documentation, be sure to prepare so as not to miss the benefits of the system.

The U.S. declaration of the end of the WTO system and its application of high tariffs have become the opening shot of a global tariff war. China has already responded to the 145% tariffs imposed on it with retaliatory tariffs of 125%, and together with India and Brazil it is strengthening a BRICS anti-U.S. coalition. What should Korean companies prepare for amid the acceleration of supply-chain restructuring and the uncertainty of each country's trade norms?