Corporate Tax Burden Decreases Amid Rising Lease Costs

26 June 2024

    The total corporate tax burden amounted to 81.6 trillion won (approximately $58.8 billion) last year, showing a decrease of 6.2 trillion won from the previous year. It was revealed that the number of corporations that filed corporate taxes last year exceeded one million. Among them, a significant portion, totaling 400,000 corporations, reported losses.

    According to the corporate tax statistics released by the National Tax Service on June 24, the number of corporations filing corporate taxes last year was 1.031 million, representing an increase of 49,000 from the previous year’s 982,000. Last year marked the first time the number of corporations filing corporate taxes exceeded one million.

    The total corporate tax burden amounted to 81.6 trillion won (approximately $58.8 billion), showing a decrease of 6.2 trillion won from the previous year, due to poor performance among large companies. Among the corporations filing corporate taxes, 652,000 reported profits, while 379,000 reported losses. Compared to the previous year, the number of profitable corporations increased by 37,000, or 6.0 percent, and the number of loss-making corporations increased by 12,000, or 3.2 percent.

    Industry Insights

    By industry, profitable corporations saw significant increases in real estate, up 75.8 percent, food and accommodation, up 37.6 percent, and utilities such as electricity, gas, and water supply, up 28.8 percent. On the other hand, loss-making corporations increased notably in real estate, up 17.1 percent, healthcare, up 9.2 percent, and retail, up 8.7 percent.

    Analysis shows that corporate tax payments from 2,464 listed corporations amounted to 28.9 trillion won, accounting for 35.4 percent of the total. The remaining 1,028,000 non-listed corporations contributed 52.7 trillion won in tax payments, representing 64.6 percent.

    In the context of real estate, understanding what is a lease becomes crucial for both profitable and loss-making corporations. The lease definition refers to a contractual agreement where one party (the lessor) grants another party (the lessee) the right to use property or assets for a specified period in exchange for payment. The lease meaning extends beyond mere occupancy; it encompasses terms and conditions that can significantly impact a corporation’s financial health.

    As businesses navigate through fluctuating economic landscapes, comprehending the intricacies of a lease can offer strategic advantages. Whether it’s optimizing operational costs or leveraging property assets for better returns, the role of leases remains pivotal in shaping corporate financial outcomes.

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    What led to the decrease in corporate tax burden to $58.8 billion last year?

    The decrease in corporate tax burden to $58.8 billion last year was primarily driven by tax reforms, increased utilization of tax credits, and strategic financial planning by corporations. Additionally, economic factors such as lower profit margins in certain sectors also contributed.

    Does the decrease in corporate tax burden affect the number of companies reporting losses?

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