Taxes on Assets (Part 1): Registration Tax and Acquisition Tax

1) National vs. local taxes (quick refresher)

Corporate Tax, Income Tax, and VAT are national taxes. By contrast, Registration & License Tax (RLT) and Acquisition Tax (AT) are imposed and collected by local governments and are triggered by registering rights/status or acquiring assets.

2) Registration & License Tax — when & rates

When due? On corporate/legal registrations and certain licenses. Typical corporate cases:

Incorporation / Capital contribution: 0.4% of paid-in amount (minimum ~ KRW 112,500).
Head office relocation: fixed amount (~ KRW 112,500 per case).
Branch establishment: fixed amount (~ KRW 40,200 per case).

Practical tip: Budget RLT together with court fees and stamp duties at incorporation or capital increase.

3) Heavy rates for overconcentration zones

If a corporation is newly registered in a metropolitan overconcentration control zone (industrial complexes excluded), or moves its HQ into such zones, the standard RLT rate is typically tripled.

Policy intent: Discourage excessive clustering in crowded metro areas.

4) Acquisition Tax — scope, base, standard rates

What’s taxed? One-time local tax on acquiring assets/rights:

Real estate: land, buildings.
Real-estate–equivalent assets: vehicles, machinery, equipment, aircraft, vessels.
Rights/memberships: golf/riding/condo/general sports memberships, etc.

Tax base: Normally the reported price at acquisition; however, use the actual price if objectively verified (e.g., government sale, import documents, court rulings, company books, public auction).

Acquisition type (general)	Standard AT rate
Gratuitous (gift etc., non-inheritance)	3.5%
Original (new construction)	2.8%
Other causes (paid acquisition)	4% (farmland 3%)

5) Heavy rates (concentration & luxury)

Business-use real estate in overconcentration zones: Standard rate + (2% × 2) uplift.
Luxury/leisure properties & facilities (e.g., country houses, golf clubs, certain amusement facilities): Standard rate + (2% × 4) uplift.

Checklists: zone map, property use, facility classification—misclassification is a frequent cause of retroactive assessments.

6) Relief for foreign-invested companies

With an approved reduction/exemption decision under the Foreign Investment Promotion Act, qualifying businesses may receive an exemption of Acquisition Tax and Property Tax for 5 (or 3) years, followed by a 50% reduction for the next 2 years—limited to real estate acquired/held for the approved investment business.

7) Common mistakes & quick checks

Wrong base: Using reported price when “actual price” rules apply (imports, auctions, gov’t sales).
Zone oversight: Ignoring overconcentration maps → unexpected heavy rates on RLT/AT.
Use mismatch: Declaring general use when it’s business-use (or luxury facility).
FIPA scope: Claiming foreign-investment relief for assets not tied to the approved business.

Quick doc pack: corporate registry, zoning confirmation, acquisition contract & payment proof, import/auction evidence (if any).

8) Summary & next topic

RLT taxes the act of registering (incorporation, capital increase, HQ/branch changes).
AT taxes the act of acquiring assets/rights (real estate, vehicles, machinery, memberships).
Heavy rates discourage metro concentration and luxury/leisure acquisitions.
Foreign-invested firms may secure multi-year local-tax relief for approved projects.

Next (Part 16): Recurring property ownership taxes—Property Tax & Comprehensive Real Estate Tax.

9) Disclaimer

This post is for general information only and not legal/tax advice. Local tax rates, zones, and reliefs vary by year and municipality. Confirm current rules or consult a qualified professional.

Tags (hidden)

Registration & License Tax Acquisition Tax Local Taxes Overconcentration Zone Foreign Investment Relief KRTaxPolicy Korean Taxation Series

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