A new tax penalty on excessive retained earnings was proposed as part of South Korea's 2014 Tax Revision Bill released on 6 August 2014. The tax penalty would be imposed at a rate of 10% on a percentage of net profits of companies with paid-in capital exceeding KRW 50 billion that have not contributed specific amounts for investments, wage increases, and dividend distributions.
There are two methods for calculating the tax, which only includes net profits earned after 2014.
Method A - Inve…