Estimate the national-tax refund when a qualifying 2026 Korean business loss is carried back to the 2025 preceding tax year, then compare that refund plus residual 15-year carryforward savings with a full carryforward. The dedicated calculator covers an individual business owner or domestic corporation, Korean RSTA SME status, timely-return requirements, the individual real-estate rental loss exclusion, the ordinary 80% non-SME corporate deduction limit, and the 2025 versus 2026 tax-rate schedules.
Load an SME corporation or individual-business example.
Confirm Korean tax-law SME status separately using revenue, asset, and independence tests.
Enter the tax loss remaining after same-year offsets and the actual final national tax.
Book-based tax loss after all required same-year offsets
Automatically capped at the smaller of the loss and preceding-year tax base
Tax base reported for the immediately preceding tax year
Actual tax after credits and reductions; exclude local income tax
Assumed constant before loss deductions for the next 15 years
Estimated national-tax carryback refund
KRW 8,000,000
Applied loss
KRW 100,000,000
Refund cap
KRW 8,000,000
Remaining loss
KRW 50,000,000
Domestic corporation · future deduction cap 100%
Before filing, recheck SME status, business attribution, tax returns, credits, and reductions.
Carryback + remaining loss
KRW 13,000,000
Immediate refund plus future saving on the remaining loss
Carryforward only
KRW 15,000,000
Estimated 15-year saving on the full loss
Carryforward only has the larger nominal benefit
The nominal difference is KRW 2,000,000. The time value of an immediate refund is not reflected.
Up to 15 years; no present-value or rate-change adjustment
Estimated saving KRW 5,000,000
| Year | Opening loss | Income before loss | Deduction | Income after loss | Tax saving | Closing loss |
|---|---|---|---|---|---|---|
| Year 1 | KRW 50,000,000 | KRW 60,000,000 | KRW 50,000,000(100%) | KRW 10,000,000 | KRW 5,000,000 | KRW 0 |
Loss used
KRW 50,000,000
Years with deductions
1 years
Estimated expiry after 15 years
KRW 0
Up to 15 years; no present-value or rate-change adjustment
Estimated saving KRW 15,000,000
| Year | Opening loss | Income before loss | Deduction | Income after loss | Tax saving | Closing loss |
|---|---|---|---|---|---|---|
| Year 1 | KRW 150,000,000 | KRW 60,000,000 | KRW 60,000,000(100%) | KRW 0 | KRW 6,000,000 | KRW 90,000,000 |
| Year 2 | KRW 90,000,000 | KRW 60,000,000 | KRW 60,000,000(100%) | KRW 0 | KRW 6,000,000 | KRW 30,000,000 |
| Year 3 | KRW 30,000,000 | KRW 60,000,000 | KRW 30,000,000(100%) | KRW 30,000,000 | KRW 3,000,000 | KRW 0 |
Loss used
KRW 150,000,000
Years with deductions
3 years
Estimated expiry after 15 years
KRW 0
A business loss does not always lose its tax value when the loss year ends.
Under Korean income-tax and corporate-tax rules, a qualifying loss may reduce income from the immediately preceding tax year or may offset taxable income arising during the following 15 years.
Carryback can produce cash sooner, while carryforward may preserve more nominal tax value when later rates or marginal brackets are higher.
This calculator models a Korean tax loss arising in 2026 and a carryback to the 2025 preceding tax year.
It covers an individual business owner or a domestic corporation, checks the main statutory conditions, estimates the national-tax refund, and compares that amount with projected carryforward savings.
It is a planning tool for Korean tax, not a filing-ready determination for another country or a substitute for a Korean tax adviser.
The result checks Korean RSTA SME status, timely filing for both relevant years, and the exclusion for an individual’s real-estate rental business loss.
A failed condition produces a zero carryback refund and identifies the reason without blocking the separate carryforward projection.
The claimed loss cannot exceed either the remaining 2026 loss or the 2025 tax base.
The estimated refund is also capped at entered final national tax after credits and reductions, which prevents a standard-rate calculation from refunding more tax than was available.
Each row shows opening loss, taxable income before the deduction, loss used, estimated national-tax saving, and closing loss.
A non-SME corporation uses the ordinary 80% annual income limit, while an SME corporation and an individual use a simplified 100% limit.
One scenario combines the immediate refund with future saving on the remaining loss.
The other carries the whole loss forward, so users can see the nominal difference before separately considering liquidity, expiry risk, and present value.
Korean Income Tax Act Article 85-2 permits a resident operating an SME defined under the Restriction of Special Taxation Act to carry back a qualifying business loss to the immediately preceding tax period.
The loss-year return and preceding-year return must both be filed by their statutory deadlines.
A loss from an individual’s real-estate rental business is excluded from this carryback relief.
Korean comprehensive income may combine several businesses and other income categories.
The official application allocates preceding-year tax to the eligible SME business, so an estimate based on the whole tax base may differ when multiple businesses, employment income, dividends, credits, or reductions are present.
Korean Corporate Tax Act Article 72 limits carryback to a domestic corporation that qualifies as an SME in the loss business year.
Both corporate-tax returns must be timely, and the claim generally subtracts the requested loss from the immediately preceding business year’s tax base before applying that preceding year’s rate.
The refund cannot exceed preceding-year corporate tax remaining after relevant credits and reductions.
A non-SME corporation cannot use this ordinary carryback relief but may still carry the loss forward for up to 15 years.
Its annual deduction is ordinarily capped at 80% of income for that business year, while an SME and certain statutory exceptions can deduct up to 100%.
| Step | Item | Method |
|---|---|---|
| 1 | Loss amount limit | Smaller of the remaining 2026 loss and 2025 tax base |
| 2 | Standard tax reduction | Original 2025 calculated tax minus tax on the reduced 2025 base |
| 3 | Estimated refund | Smaller of the standard reduction and entered final national-tax cap |
| 4 | Annual carryforward | Smaller of opening loss and annual income multiplied by the deduction limit |
| 5 | Nominal comparison | Immediate refund plus later savings compared with full-loss later savings |
An individual uses Korea’s comprehensive-income brackets from 6% through 45%.
An ordinary for-profit corporation uses the 2025 rates of 9%, 19%, 21%, and 24%, together with the applicable quick deductions.
An individual keeps the current comprehensive-income schedule for the projection.
A corporation uses the 2026 rates of 10%, 20%, 22%, and 25%, which can make future nominal savings differ from a refund calculated with 2025 rates.
Every projected year assumes the same taxable income before loss deduction and the same 2026 rate schedule.
The tool does not forecast legislative changes, business growth, inflation, credits, minimum tax, or a discount rate.
A remaining balance after year 15 is shown as estimated expiry rather than being assigned further tax value.
Assume a 2026 loss of KRW 150 million, a planned carryback of KRW 100 million, a 2025 tax base of KRW 100 million, and final 2025 corporate tax of KRW 8 million.
Standard 2025 corporate tax is KRW 9 million and falls to zero after the carryback, but the entered final tax caps the refund at KRW 8 million.
The remaining KRW 50 million produces an estimated KRW 5 million of future saving when annual taxable income is KRW 60 million.
Full carryforward produces KRW 15 million under the 2026 rate assumption, so its nominal total is KRW 2 million higher than the combined KRW 13 million carryback scenario.
That difference does not value receiving KRW 8 million sooner.
Assume a qualifying individual has a KRW 40 million loss, carries all of it back, and had a 2025 comprehensive-income tax base of KRW 60 million.
Standard tax at KRW 60 million is KRW 8.64 million, while tax after reducing the base to KRW 20 million is KRW 1.74 million.
If final national tax was KRW 7 million, the estimated refund is KRW 6.9 million.
At KRW 30 million of annual future taxable income, full carryforward saves an estimated KRW 4.74 million, illustrating why the marginal bracket in the year of use matters.
A corporation that does not qualify as an SME receives no ordinary carryback refund under this model.
If annual income before loss is KRW 100 million, only KRW 80 million of loss is ordinarily deductible each year, leaving at least KRW 20 million taxable.
A large opening loss combined with modest future income can leave a material balance after year 15, so the expiry column should be treated as a key planning risk rather than a minor detail.
No amount can be deducted twice.
A loss used for the preceding-year refund is treated as consumed, and only the unused balance remains available for the 15-year carryforward period.
No.
SME status is required for this ordinary carryback, but a non-SME corporation can generally carry a qualifying loss forward for 15 years subject to the 80% annual income limit.
Not automatically.
Korean tax adjustments for nondeductible expenses, taxable additions, depreciation, reserves, and other items can make the tax loss different from financial-statement net loss.
An individual must also complete the required same-year income offsets first.
No.
Every tax amount in this calculator is national income tax or national corporate tax.
Confirm the local-income-tax amendment and refund process separately with the relevant Korean local authority.
Korean tax authorities can recapture a refund with an interest amount if a later correction reduces the loss or shows that carryback conditions were not met.
Use completed tax adjustments and documented SME status rather than provisional management accounts.
No.
The comparison does not discount future tax savings, guarantee future profits, or price liquidity and expiry risk.
An immediate refund can be economically valuable even when the undiscounted carryforward total is slightly larger.
This tool applies standard rates to simplified inputs and uses entered final national tax as a cap.
Actual Korean refund determination may differ because of business attribution, credits, reductions, minimum tax, special rates, assessment, or correction.
Obtain advice from a Korean certified tax accountant or other qualified adviser when the amount is material or several businesses and income categories are involved.
Take the remaining tax loss, preceding-year tax base, and final national tax from the relevant Korean schedules and enter them above.
Then use the two annual tables to discuss immediate liquidity, future taxable income, and expiry risk with your Korean tax adviser before the filing deadline.