South Korea's cabinet finalises the 2026 tax reform package as 11 bills, including the VAT Act, for the National Assembly

What changed in detail

These are bills, not law. South Korea’s cabinet (State Council) finalised the government’s 2026 Tax Reform package on 1 September 2026 as 11 tax-law amendment bills, including the Value Added Tax Act.

The bills were to be submitted to the National Assembly by 3 September 2026 for review in the regular session.

The package had been announced as a proposal on 3 August 2026. The cabinet version also widens the transitional VAT zero-rating for urban rail construction services under the Restriction of Special Taxation Act.

The Ministry of Finance and Economy’s release states that the bills are scheduled for review in the regular session of the National Assembly. The bills are not yet law.

The earlier proposal-stage entries are kr-tax-invoice-field-renaming-2027 and kr-foreign-corp-domestic-pe-vat-2026.

What it means

The cabinet decision moves the package from proposal to bill, but the National Assembly can still change it, so VAT changes in it should be planned for, not implemented.

The regular session is where the content is likely to move. Teams tracking Korean VAT changes should follow the bills’ progress rather than treat the 3 August proposal or the cabinet text as final.

The urban rail zero-rating change is the one VAT item flagged as altered between the proposal and the cabinet version; anyone supplying construction services to rail projects should check that item first.