Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-Summary§18 |
Korea, Republic of |
2021 |
Sectors |
Internal taxes |
Energy |
Relevant information
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18. (...) Recently, the Government committed to advance energy transition by increasing the share of renewable electricity to 20% by 2030, and to 30% 35% by 2040, and to gradually phase out coal and nuclear from the energy mix. To reach these targets, the Government lowered the consumption tax and import surcharge on liquified natural gas while raising the tax on coal, and enhanced decarbonization across all energy sectors in line with its Green New Deal. (...).
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Keywords
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Climate
Emissions
Energy
Green
Renewable
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-2§12 |
Korea, Republic of |
2021 |
Measures |
Internal taxes |
Energy |
Relevant information
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2.12. During the review period, tax reform in line with policy objectives, including to cope with COVID-19 impact to the economy, was undertaken. (...) The 2018 tax reform included: (...) further rationalization of the overall tax regime (e.g. taxes levied on bituminous coals and natural liquefied gas (LNG) adjusted to their environmental costs). (...).
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-4§90 |
Korea, Republic of |
2021 |
Measures |
Internal taxes |
Services |
Relevant information
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4.90. Total national tax revenue as a share of GDP rose and remains relatively low (15.3% in 2019, Table 1.1). (...) Income (since 2015) and corporation (since 2018) taxes became the main sources of tax receipts, followed by the VAT, which remains the main indirect tax component, followed by the transportation-energy-environment tax. (...).
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-4§91 |
Korea, Republic of |
2021 |
Measures |
Internal taxes |
Services |
Relevant information
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4.91. Korea's relatively complex indirect tax structure remains unchanged. (...) There is also a transportation (energy environment) tax, education tax, and special tax on rural development. Exports are generally exempt from indirect taxes. Exports are zero-rated for VAT.
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-4§93 |
Korea, Republic of |
2021 |
Measures |
Internal taxes |
Energy, Manufacturing, Services |
Relevant information
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4.93. The individual consumption (special excise) tax continues to apply to a wide range of goods. Rates vary from 5% on cars of more than 1,000 cc and motorcycles with engine displacement in excess of 125 cc to 20% (...) Hybrid (from 2009 to 2021) and electric cars (from 2012 to 2022) remain exempt from the individual consumption tax (up to KRW 1 million and KRW 3 million, respectively). Individual consumption taxes in form of specific rates also apply, in principle, to cigarettes, petroleum products other than gasoline, and diesel oil that are subject to a transportation (energy environment) tax (see below) until end-2021. [126] (...). To mitigate the negative impact of the pandemic, the individual consumption tax on motor vehicles was cut by 70% from March to June 2020 without further extension; nevertheless, a 3.5% flexible rate (up to KRW 1 million) has applied from July 2020 to June 2021.
[126] As at 2020, the rates stood at kerosene KRW 90 per litre (KRW 63 per litre effective from 1 July 2014); heavy fuel oil KRW 17 per litre; propane gas KRW 20 per kg for domestic and commercial use (KRW 14 per kg effective from 1 July 2014); (...) and KRW 8.4 per kg (for integrated energy suppliers, new and renewable energy suppliers, and persons setting up electric installations for private use); bituminous coal for electric power generation (effective from February 2018) (...).
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-4§94 |
Korea, Republic of |
2021 |
Measures |
Internal taxes |
Energy, Services |
Relevant information
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4.94. The transportation-energy-environment tax law was last amended on 1 January 2019. Under this fourth three-year extension of its sunset clause, the transportation-energy-environment tax continues to be levied on gasoline (KRW 475 per litre) and diesel oil (KRW 340 per litre) until end 2021 (instead of the individual consumption tax); its rates remain unchanged. As of 2021, the flexible transportation-energy-environment tax framework set on 21 May 2009 continued to apply to gasoline and diesel oil within a 30% range of the statutory tax rates, i.e. KRW 529 per litre and KRW 375 per litre, respectively. Conditional exemptions under the individual consumption tax apply to gasoline and diesel for certain use.
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-4§99 |
Korea, Republic of |
2021 |
Measures |
Internal taxes |
Other |
Relevant information
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4.99. Korea imposes environmental waste charges on certain items that contain harmful substances and are difficult to recycle (Act on Promotion of Saving and Recycling of Resources). The charge is intended to ensure that manufacturers bear the cost of processing waste. It applies equally to imports and domestic goods. [131]
[131] At the time of the previous Review, the charges were set at e.g. KRW 24.9 per plastic container of insecticide or KRW 30.7 if the container exceeds 500 ml; and KRW 75 or KRW 150 per kg of the plastic or synthetic resin used for domestic goods.
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Keywords
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Environment
Plastic
Recycle
Waste
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-5§43 |
Korea, Republic of |
2021 |
Sectors |
Internal taxes, Tax concessions |
Agriculture |
Relevant information
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5.43. The agriculture sector also benefits from preferential tax treatment (Section 3.3.1): (...) Oil fuels used for agricultural machines, including tractors and heaters, are exempted from all fuel taxes, including the transportation-energy-environment tax, the auto tax, individual consumption tax, and VAT.
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-5§45 |
Korea, Republic of |
2021 |
Sectors |
Internal taxes, Tax concessions |
Agriculture |
Relevant information
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5.45. Farmers also benefit from zero or low irrigation water fees; according to the authorities, this is because the irrigation facilities were built by farmers at their own expense. Irrigation water is either provided by the Korea Rural Community Corporation (KRC), a public company, or by local governments. The KRC provides irrigation water free of charge, and local governments' prices do not cover operation and maintenance fees. This arrangement reduces the farmers' motivation to conserve water, adopt water-saving technologies, and diversify away from paddy rice production. The authorities disagree, and state that the facilities were built in the 1970s by the Farmland Improvement Corporative, formed by farmers. The facilities were transferred to the KRC in 2000, and it covers the operation cost with its profits. The authorities also indicate that, as part of the efforts to achieve the Net Zero carbon emissions target by 2050, Korea announced that it is adopting various water saving technologies.
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Keywords
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Climate
Conservation
Emissions
Water
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Secretariat TPR |
WT/TPR/S/414/REV.1 |
S-5§83 |
Korea, Republic of |
2021 |
Sectors |
Internal taxes |
Energy |
Relevant information
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5.83. In 2019, (...) the consumption tax on coal was increased by about 30% (from KRW 36 per kg to KRW 46 per kg), so that their prices adequately reflect their related environmental costs.
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