Article 1(Purpose) #
The purpose of this Act is to secure revenue sources required to increase education spending in order to improve the quality of education.
[This Article Wholly Amended on Dec. 27, 2010]
Article 2(Definitions) #
The definitions of terms used in this Act shall be the same as those set forth in the Framework Act on National Taxes, the Individual Consumption Tax Act, the Traffic, Energy and Environment Tax Act, and the Liquor Tax Act, excluding those defined in this Act.
[This Article Wholly Amended on Dec. 27, 2010]
Article 3(Taxpayer) #
Any of the following persons shall be liable to pay education tax under this Act: <Amended on Jan. 1, 2014; Dec. 23, 2014>
1. Any of the following persons listed in the Appendix among those who are engaged in the business of finance or insurance in the Republic of Korea (hereinafter referred to as "financial or insurance business entities");
2. Any person liable to pay individual consumption tax (excluding the tax on goods falling under Article 1(2)4a,b,e,g,i and subparagraph 6 of the same paragraph of the Individual Consumption Tax Act; hereinafter the same shall apply) under the Individual Consumption Tax Act;
3. Any person liable to pay traffic, energy, and environment tax under the Traffic, Energy and Environment Tax Act;
4. Any person liable to pay liquor tax (excluding the tax on ethanol for liquor making, unrefined rice wine, and medicinal wine; hereinafter the same shall apply) under the Liquor Tax Act.
[This Article Wholly Amended on Dec. 27, 2010]
Article 4(Non-taxation) #
The revenue from trust property in public trust prescribed in the Public Trust Act operated by financial or insurance business entities shall not be subject to education taxes assessed. <Amended on Mar. 18, 2014>
[This Article Wholly Amended on Dec. 27, 2010]
Article 5(Tax base and tax rate) #
(1) The amount of education tax shall be the amount calculated by multiplying the tax base falling under each of the following subparagraphs by the applicable tax rate; provided, in the case of subparagraph 1, the amount of education tax on the revenue arising in relation to foreign currency sale transactions under a repurchase agreement with the Bank of Korea pursuant to the Bank of Korea Act (hereinafter referred to as "swap transactions") shall be the amount calculated by multiplying a tax rate of 5/1,000 to the tax base, notwithstanding the tax rate under subparagraph 1, and shall not exceed the amount of the revenue arising from such swap transactions after deducting all costs and expenses related thereto, as prescribed by Presidential Decree. <Amended on Dec. 31, 2019; Dec. 31, 2022; Dec. 23, 2025>
┌──┬───────────────────┬────────────────────────┐
│ Item │ Tax Base │ Tax Rate │
├──┼───────────────────┼────────────────────────┤
│ 1 │ Financial and insurance business entities‘ revenues │ 5/1000 (if the taxable base exceeds KRW 1 trillion, │
│ │ │ For the excess amounts, 10/1000) │
├──┼───────────────────┼────────────────────────┤
│ 2 │ that shall be paid under the Individual Consumption Tax Act │ 30/100; provided, in cases of, under the Individual Consumption Tax Act, │
│ 2 │ Shall be paid under the Individual Consumption Tax Act │ 30 percent; provided, in cases of, under the Individual Consumption Tax Act, │
│ │ │ │ goods, it shall be 15/100. │
├──┼───────────────────┼────────────────────────┤
│ 3 │ Under the Transportation, Energy and Environmental Tax Act │ 15/100 |
│ │ Amount of traffic, energy, and environment tax to be paid │ │
├──┼───────────────────┼────────────────────────┤
│ 4 │ The amount of liquor tax payable under the Liquor Tax Act │ 10/100; provided, for each of the following types of liquor, │
│ │ │ │ 30/100 shall apply. │
│ │ │ │ a. Beer under Article 8(1)2 of the Liquor Tax Act │
│ │ │ │ b. Alcoholic beverages, other than those referred to in item a, for which the liquor tax rate exceeds │
Article 6(Place of tax payment) #
(1) The place for payment of education tax assessed on the amount of revenue earned by a financial or insurance business entity shall be where their headquarters or main offices (or the main domestic business establishment when they have their headquarters or main offices abroad) are located; provided, in cases where the financial or insurance business entities have two or more establishments, the place for payment of tax may be the location of each business establishment as prescribed by Presidential Decree. <Amended on Mar. 2, 2016>
(2) Notwithstanding paragraph (1), the place for payment of education tax assessed on the amount of revenue earned by a financial or insurance business entity adopting the consolidated tax return system defined in subparagraph 6 of Article 2 of the Corporate Tax Act (hereinafter referred to as the "consolidated tax return system") shall be the place for tax payment of its consolidated parent corporation defined in subparagraph 9 of the same Article (only applicable where the consolidated parent corporation is a financial or insurance business entity). <Added on Mar. 2, 2016; Dec. 24, 2018; Dec. 31, 2018>
[This Article Wholly Amended on Dec. 27, 2010]
Article 7(Imputed time for income of financial or insurance business entities) #
(1) Articles 40 and 43 of the Corporate Tax Act and Article 39 of the Income Tax Act shall apply mutatis mutandis to the imputed time for income earned by financial or insurance business entities. <Amended on Dec. 31, 2022>
(2) Notwithstanding paragraph (1), the imputed time for income of a financial or insurance business entity under the following classification pursuant to subparagraph 6 of the Appendix shall be the taxable period specified in the relevant subparagraph: <Added on Dec. 31, 2022>
1. Insurance premiums: The taxable period in which the date of actual income falls; provided, in cases of insurance premiums corresponding to the insurance period that has not elapsed as of the end of the taxable period, it shall be the taxable period under the following classification:
a. Where an insurance contract is maintained: Each taxable period that includes the insurance period corresponding to the relevant insurance premium;
b. Where an insurance contract is terminated: The taxable period that includes the date of termination of the relevant contract;
2. Interest accrued from the amount of money borrowed in accordance with the terms and conditions of an insurance policy: The taxable period that includes the date of actual income.
[This Article Wholly Amended on Dec. 27, 2010]
Article 8(Taxable period) #
(1) The taxable period of education tax assessed on the amount of revenue earned by a financial or insurance business entity shall be as follows; provided, the provisions of Article 7 and Article 8(1) through (4) of the Corporate Tax Act shall apply mutatis mutandis in the case of a change in the business year, dissolution, liquidation, merger, spin-off etc.: <Amended on Dec. 29, 2015; Dec. 24, 2018>
1. Where the taxpayer is a corporation: the business year provided for in Article 6 of the Corporate Tax Act;
2. Where the taxpayer is an individual: the taxable period provided for in Article 5 of the Income Tax Act.
(2) The initial taxable period for a person who becomes a financial or insurance business entity shall be the period from the date when the business commences to the date when the taxable period in which the said date falls ends.
(3) The taxable period for a financial or insurance business entity that closes its business shall be the period from the start date of the taxable period in which the end date falls to the closing date.
[This Article Wholly Amended on Dec. 27, 2010]
Article 8-2(Interim prepayment) #
(1) Each financial or insurance business entity (excluding a corporation whose business year referred to in Article 8(1)1 does not exceed three months) shall pay the amount (hereinafter referred to as "interim tax") computed by multiplying three by the amount computed by dividing the amount of tax assessed as education tax for the immediately preceding taxable period by the number of months in that taxable period at the tax office having jurisdiction over the place for tax payment, the Bank of Korea (including its agencies), or a postal office, as prescribed by Presidential Decree, within two months after expiration of the following periods (hereinafter referred to as "interim prepayment period"); provided, the interim tax shall be deemed nil in the first taxable period of a new corporation after incorporation, where a financial or insurance business entity has no computed amount of tax assessed as education tax in the immediately preceding taxable period or the amount of education tax for the immediately preceding business year is not assessed by the end date of the relevant interim prepayment period:
1. The first interim prepayment period: the first three months after expiration of the preceding taxable period;
2. The second interim prepayment period: three months after expiration of the first interim prepayment period;
3. The third interim prepayment period: three months after expiration of the second interim prepayment period.
(2) Notwithstanding paragraph (1), interim prepayment in cases of merger, spin-off, a change in the business year, etc. shall be prescribed by Presidential Decree.
[This Article Added on Dec. 29, 2015]
Article 9(Filing tax returns and paying taxes) #
(1) Upon filing a return, stating the amount of tax computed by deducting the interim tax from the amount of tax calculated according to the tax base for the respective taxable period, each financial or insurance business entity shall pay such tax to the head of a competent tax office within three months (four months in the cases of financial or insurance business entities adopting the consolidated tax return system) from the last day of the month in which the respective taxable period ends; provided, where the interim tax amount paid exceeds the amount of tax calculated according to the tax base for the respective taxable period, such excess shall be refunded pursuant to Article 51 of the Framework Act on National Taxes, or appropriated for other national taxes or forced collection charges: <Amended on Dec. 29, 2015; Dec. 20, 2016; Dec. 30, 2017; Dec. 31, 2018; Dec. 29, 2020; Dec. 31, 2022>
1. Deleted; <Dec. 29, 2015>
2. Deleted; <Dec. 29, 2015>
3. Deleted; <Dec. 29, 2015>
4. Deleted. <Dec. 29, 2015>
(2) Where any taxpayer referred to in subparagraphs 2 through 4 of Article 3 files a tax return and pays the relevant tax in accordance with the relevant tax statutes, he or she shall file an education tax return and pay the education tax.
(3) Matters necessary for filing tax returns and paying taxes under paragraphs (1) and (2) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 27, 2010]
Article 10(Assessment and collection) #
(1) If a person liable to report on education tax in accordance with Article 9(1) fails to report thereon, or if there is any error or omission in the details of the report, the head of the competent tax office shall determine or correct the tax base and tax amount thereof, and if any error or omission is found in the tax base and tax amount as so determined or corrected, he or she shall correct or re-correct them. <Amended on Dec. 20, 2016>
(2) If the amount of tax as so reported in accordance with Article 9(1) is not paid, or not paid in full, and the head of the competent tax office has determined, corrected, or re-corrected the amount of tax not yet paid in accordance with paragraph (1), he or she shall collect the amount of such tax to be additionally paid without delay. <Amended on Dec. 20, 2016>
(3) The head of the competent tax office shall assess and collect the education tax assessed on the amount of individual consumption tax, traffic, energy and environment tax, or liquor tax in the same manner as individual consumption tax, traffic, energy and environment tax, or liquor tax is assessed and collected. <Amended on Dec. 20, 2016>
(4) If a financial or insurance business entity (excluding a corporation, the business year referred to in Article 8(1)1 of which does not exceed three months) fails to pay wholly or partially interim tax payable under Article 8-2, the head of the competent tax office shall collect unpaid interim tax in accordance with the National Tax Collection Act. <Added on Dec. 20, 2016>
(5) Notwithstanding paragraph (4), if any of the following corporations fails to pay interim tax payable in the first business year after a spinoff, the interim tax assessed, as prescribed by Article 8-2(2), shall be collected in accordance with the National Tax Collection Act: <Added on Dec. 20, 2016>
1. A corporation incorporated in the course of a spin-off;
2. Where part of the corporation divided merges with another corporation and as a result, the latter survives the merger, the surviving corporation.
[This Article Wholly Amended on Dec. 27, 2010]
Article 11 #
Deleted. <Dec. 30, 2006>
Article 12(Refunds) #
(1) With respect to a refund of any amount of education tax assessed on the amount of revenue earned by financial or insurance business entities, which has been incorrectly paid or overpaid, Articles 51, 51-2, 52 through 54 of the Framework Act on National Taxes shall apply mutatis mutandis.
(2) With respect to a refund of any amount of education tax assessed on the amount of individual consumption tax, traffic, energy and environment tax or liquor tax, which has been incorrectly paid or overpaid, and with respect to a refund of any amount of education tax assessed on the amount of individual consumption tax, traffic, energy and environment tax or liquor tax which is refundable as a result of a refund of the relevant tax, Articles 51, 51-2 and 52 through 54 of the Framework Act on National Taxes, Articles 20 and 20-2 of the Individual Consumption Tax Act, Article 17 of the Traffic, Energy and Environment Tax Act, or Articles 18 and 19 of the Liquor Tax Act shall apply mutatis mutandis. <Amended on Dec. 31, 2022>
[This Article Wholly Amended on Dec. 27, 2010]
Article 13(Non-inclusion in necessary or deductible expenses) #
The amount of education tax assessed on any amount of tax defined as the education tax base, which shall not be included in the necessary or deductible expenses under the Income Tax Act or the Corporate Tax Act, shall not be included in the necessary or deductible expenses in calculating the amount of income under the Income Tax Act or the Corporate Tax Act.
[This Article Wholly Amended on Dec. 27, 2010]