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Korea Tax Accounting Level 2 (세무회계 2급, South Korea)

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Exam Review

Key Facts: Tax Accounting Level 1 (Korea) Exam

80 Minutes

Examination Duration (주관식 필답형 계산/서술 실무)

KACPTA Official Examination Guide

70 / 100

Minimum Passing Score (국가공인 자격 합격기준)

KACPTA Qualifying Regulations

KRW 25,000

Examination Registration Fee (응시수수료)

KACPTA License Registration Portal

Level 1

Highest Grade in National Tax Accounting Certification (세무회계 1급)

Framework Act on Qualifications

4 Major Acts

Core Scope: Corporate Tax, Income Tax, VAT, Framework Act

Ministry of Economy and Finance / KACPTA

100 MCQs

OpenExamPrep Comprehensive Computational Practice Bank

OpenExamPrep Curricular Design

Korea Tax Accounting Level 1 (세무회계 1급) is the highest tier of the KACPTA national tax accounting certifications. It requires scoring 70/100 or higher on an intensive 80-minute written computational paper covering corporate, individual, VAT, and tax procedure laws. This 100-question practice bank provides rigorous calculations and authentic dual-language Korean statutory terminology.

Sample Tax Accounting Level 1 (Korea) Practice Questions

Try these sample questions to review concepts for the Tax Accounting Level 1 (Korea) exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1During the tax year, Corporation A paid KRW 15,000,000 in traffic fines and personal administrative sanctions levied directly against its Representative Director (대표이사), recording the entire amount as administrative expenses (잡손실) on its income statement. What is the required corporate tax adjustment (세무조정) and income disposition (소득처분) under the Corporate Tax Act (법인세법)?
A.손금불산입 (Disallowance of Deductible Expense) KRW 15,000,000, disposed as 기타사외유출 (Other Outflow).
B.손금불산입 (Disallowance of Deductible Expense) KRW 15,000,000, disposed as 상여 (Bonus to Representative).
C.손금산입 (Inclusion of Deductible Expense) KRW 15,000,000, disposed as -유보 (Negative Retained Earnings).
D.익금산입 (Inclusion in Taxable Revenue) KRW 15,000,000, disposed as 유보 (Retained Earnings).
Explanation: When a corporation pays personal fines or penalties legally imposed upon its representative director, the expenditure constitutes a direct economic benefit conferred upon the representative without business justification. Under Article 19 and Article 67 of the Corporate Tax Act, this payment is non-deductible (손금불산입) and must be disposed as a deemed bonus (상여) to the representative, subjecting the individual to personal wage income tax.
2Domestic Corporation B (a general corporation, not a holding company) owns a 30% equity stake in listed Domestic Corporation C. In the current tax year, Corporation B received KRW 50,000,000 in dividend distributions from Corporation C. Under the revised Corporate Tax Act dividend received deduction (수입배당금 익금불산입) schedule, if Corporation B has no interest-bearing liabilities, what is the non-taxable dividend amount (익금불산입액)?
A.KRW 50,000,000
B.KRW 40,000,000
C.KRW 25,000,000
D.KRW 15,000,000
Explanation: Under the unified Corporate Tax Act dividend received deduction rules (법인세법 제18조의2), for general corporations holding shares in domestic listed corporations: ownership under 20% receives a 30% deduction, 20% to under 50% receives a 50% deduction, and 50% or more receives a 100% deduction. Since Corporation B holds exactly 30% of a listed company, the applicable exclusion rate is 50%, resulting in KRW 50,000,000 × 50% = KRW 25,000,000 non-taxable revenue (익금불산입, 기타).
3Upon the retirement of an executive director, Corporation D paid KRW 180,000,000 as retirement severance pay and recorded it as severance expense. The corporate articles of incorporation set the maximum statutory executive severance limit (임원 퇴직급여 한도액) at KRW 120,000,000. What is the appropriate tax adjustment and income disposition?
A.손금불산입 KRW 60,000,000 (기타사외유출)
B.손금불산입 KRW 60,000,000 (상여)
C.손금산입 KRW 60,000,000 (유보)
D.익금산입 KRW 60,000,000 (배당)
Explanation: Under Article 26 of the Corporate Tax Act and Article 44 of its Enforcement Decree, any executive severance pay disbursed in excess of the ceiling prescribed by the articles of incorporation or authorized executive severance regulations cannot be recognized as a deductible expense. The excess of KRW 60,000,000 (KRW 180,000,000 - KRW 120,000,000) must be disallowed (손금불산입) and treated as a bonus (상여) to the retiring executive.
4At the end of Year 1, Corporation E erroneously recorded its ending merchandise inventory at KRW 80,000,000 on its financial statements, whereas the statutory tax cost base under the reported FIFO method was KRW 95,000,000. In Year 2, this entire batch of inventory was sold to third parties. What are the required tax adjustments in Year 1 and Year 2?
A.Year 1: 손금불산입 KRW 15,000,000 (기타); Year 2: 손금산입 KRW 15,000,000 (기타)
B.Year 1: 손금산입 (재고자산) KRW 15,000,000 (-유보); Year 2: 익금산입 (전기재고자산) KRW 15,000,000 (유보)
C.Year 1: 익금산입 (재고자산평가감) KRW 15,000,000 (유보); Year 2: 손금산입 (전기재고자산) KRW 15,000,000 (-유보)
D.Year 1: 익금산입 KRW 15,000,000 (기타사외유출); Year 2: No adjustment required
Explanation: In Year 1, understating ending inventory by KRW 15,000,000 overstates cost of goods sold and understates accounting profit. For tax purposes, the asset value must be stepped up: 익금산입 (재고자산평가감) KRW 15,000,000 (유보). In Year 2, when the inventory is disposed of, the beginning tax asset difference reverses into cost of goods sold: 손금산입 KRW 15,000,000 (-유보).
5A major individual shareholder who holds 25% of Corporation F's shares withdrew KRW 100,000,000 from company bank accounts for personal real estate speculation, which was recorded on the books as an uncollectible loss (대손상각비) because the shareholder refused to repay. What is the corporate tax adjustment and income disposition?
A.손금불산입 KRW 100,000,000 (기타사외유출)
B.손금불산입 KRW 100,000,000 (배당)
C.손금불산입 KRW 100,000,000 (유보)
D.손금산입 KRW 100,000,000 (-유보)
Explanation: When corporate funds are appropriated by a shareholder without legitimate business cause and written off, the write-off cannot be recognized as a deductible bad debt loss (손금불산입). Because the economic benefit accrued to an equity shareholder (출자자) who is not an employee, the income disposition is categorized as a constructive dividend (배당) pursuant to Article 67 of the Corporate Tax Act.
6Corporation G received a national tax refund comprising principal tax overpayment of KRW 40,000,000 and national tax refund addition interest (국세환급금가산금) of KRW 2,400,000, recognizing both as non-operating revenue (영업외수익). What is the appropriate corporate tax adjustment?
A.익금산입 KRW 2,400,000 (유보)
B.익금불산입 KRW 42,400,000 (기타)
C.익금불산입 (국세환급금가산금) KRW 2,400,000 (기타) and 익금불산입 (법인세 환급액) KRW 40,000,000 (기타)
D.No adjustment is required as both amounts constitute taxable operating revenue.
Explanation: Under Article 18 of the Corporate Tax Act, refunds of national taxes (such as corporate income tax) that were originally non-deductible when paid, along with statutory refund interest (국세환급금가산금), are explicitly classified as non-taxable revenue (익금불산입). Because both amounts were credited to accounting revenue, both must be excluded via 익금불산입, disposed as 기타 (or -유보 if adjusting a tax asset).
7Corporation H paid its Chief Executive Officer an annual base salary of KRW 300,000,000. The company's general shareholders' meeting had established a compensation cap of KRW 240,000,000 for the CEO. What tax adjustment must be made for the year?
A.손금불산입 KRW 60,000,000 (기타사외유출)
B.손금불산입 KRW 60,000,000 (상여)
C.손금산입 KRW 60,000,000 (유보)
D.익금산입 KRW 60,000,000 (배당)
Explanation: Under Article 26 Item 1 of the Corporate Tax Act and Article 43 of its Enforcement Decree, officer compensation paid in excess of the ceiling resolved by the articles of incorporation or general meeting of shareholders cannot be deducted as an expense (손금불산입). The excess of KRW 60,000,000 must be disposed as a bonus (상여) to the officer.
8Which of the following tax payments made by a domestic corporation during the fiscal year is recognized as a fully DEDUCTIBLE expense (손금) under the Corporate Tax Act?
A.Corporate income tax expense (법인세 비용) paid on annual earnings
B.Fines and surcharges for non-payment of road traffic regulations (도로교통법상 과태료)
C.Input value-added tax disallowed due to failure to receive a statutory tax invoice (세금계산서 미수취 매입세액)
D.Property tax (재산세) assessed on corporate factory real estate
Explanation: Under Article 21 of the Corporate Tax Act, local property tax (재산세) and comprehensive real estate holding tax (종합부동산세) assessed on operational corporate real estate represent ordinary business holding costs and are fully deductible (손금). In contrast, corporate income taxes, non-creditable input VAT due to invoice default, and regulatory fines are statutory non-deductible items (손금불산입).
9A tax audit reveals that Corporation J failed to record KRW 66,000,000 (VAT inclusive: supply value KRW 60,000,000, VAT KRW 6,000,000) of cash sales during the year. The cash proceeds were completely appropriated by the Representative Director for personal use, and no output VAT was reported. What is the correct corporate tax adjustment?
A.익금산입 (매출누락) KRW 60,000,000 (상여)
B.익금산입 (매출누락) KRW 60,000,000 (상여) and 익금산입 (부가가치세 예수금) KRW 6,000,000 (사외유출)
C.익금산입 (매출누락) KRW 60,000,000 (유보)
D.익금산입 (매출누락) KRW 66,000,000 (상여)
Explanation: For corporate income tax purposes, the omitted corporate revenue is the net supply price of KRW 60,000,000, as the KRW 6,000,000 VAT portion represents output VAT liability collected for the state. Because the representative appropriated the cash, the revenue addition of KRW 60,000,000 is disposed as a bonus (상여) to the representative. The KRW 6,000,000 output VAT will be assessed separately under the VAT Act with penalties.
10Corporation K paid KRW 20,000,000 in interest on private debentures where the true identity of the creditor could not be verified (채권자불분명 사채이자). The company withheld statutory withholding tax of KRW 8,800,000 (withholding rate 44% including local income tax) and paid the remaining KRW 11,200,000 in cash. What is the required corporate tax adjustment and income disposition?
A.손금불산입 KRW 20,000,000, total amount disposed as 상여
B.손금불산입 KRW 20,000,000, total amount disposed as 기타사외유출
C.손금불산입 KRW 20,000,000, of which KRW 8,800,000 is 기타사외유출 and KRW 11,200,000 is 상여 (Bonus to Representative)
D.손금불산입 KRW 11,200,000 (상여) only, with no adjustment for withheld taxes
Explanation: Under Article 28 Paragraph 1 Item 1 of the Corporate Tax Act and Article 106 of its Enforcement Decree, interest paid to undisclosed creditors is completely non-deductible (손금불산입). The statutory withholding tax collected and remitted to the government (KRW 8,800,000) is disposed as 기타사외유출 (Other Outflow), while the net proceeds disbursed without clear payee documentation (KRW 11,200,000) are attributed as a deemed bonus (상여) to the representative director.

About the Tax Accounting Level 1 (Korea) Exam

The Korea Tax Accounting Level 1 (세무회계 1급) is the premier national accredited tax qualification administered by the Korean Association of Certified Public Tax Accountants (KACPTA). Designed for seasoned corporate tax managers, accounting officers, and aspiring tax consultants, it evaluates in-depth mastery of the Corporate Tax Act (법인세법), Income Tax Act (소득세법), Value Added Tax Act (부가가치세법), and Framework Act on National Taxes (국세기본법). The examination tests practical ability to perform advanced tax reconciliation adjustments (세무조정), compute statutory ceilings, and resolve procedural tax disputes.

Exam sponsor: Korean Association of Certified Public Tax Accountants (한국세무사회 / KACPTA). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

100-minute 필기시험 in two parts. 세법1부: 법인세법, 부가가치세법, 조세특례제한법. 세법2부: 국세기본법, 소득세법, 조세특례제한법. Each part is set as 객관식 15문항 + 주관식 5문항 + 약술형 2문항. Pass: at least 40 points in each part and a combined average of at least 60 points.

Time Limit

100 minutes

Passing Score

At least 40 points in each of 세법1부 and 세법2부 and a combined average of at least 60 points

Exam / Certification Fees

KRW 25,000 (KACPTA 접수수수료 for 세무회계 all grades; 자격증 발급비 KRW 5,000 extra)

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Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

45%

Corporate Tax Act: Advanced Tax Adjustments & Income Dispositions (법인세법 - 세무조정 및 소득처분)

Examines advanced corporate tax reconciliation mechanics under the Corporate Tax Act: taxable revenue additions (익금산입) such as deemed rental deposit interest (간주임대료) and unfair trade gains; non-taxable revenue deductions (익금불산입) such as dividend received deduction (수입배당금 익금불산입) and refund of national taxes; deductible expenses (손금) and disallowed expenses (손금불산입) such as non-deductible taxes, fines, and penalties; income disposition categories (소득처분: 유보, 기타사외유출, 상여, 배당, 기타소득); tangible and intangible asset depreciation limits (감가상각비 시부인 계산) and prior-year excess write-back; business promotion/entertainment expense thresholds (기업업무추진비 한도액); statutory and general charitable contribution caps (기부금 한도 및 이월공제); bad debt allowances and write-offs (대손충당금 및 대손금 시부인); loss carryforwards (이월결손금 공제한도 80%); and total corporate tax liability calculation.

30%

Income Tax Act: Global Income, Financial Taxation & Capital Gains (소득세법 - 종합소득세, 금융소득 및 양도소득세)

Covers comprehensive individual income tax principles under the Income Tax Act: classification and computation of global income categories (이자소득, 배당소득, 사업소득, 근로소득, 연금소득, 기타소득); dividend gross-up mechanism (11%) and imputed tax credit; comprehensive taxation of financial income exceeding the KRW 20 million threshold; business income calculation methods, tax reconciliation adjustments, and double-entry book-keeping tax credits (기장세액공제 20%); retirement income separation; and capital gains tax (양도소득세) calculations including actual transfer price, statutory acquisition costs, special deduction for long-term holding (장기보유특별공제 up to 80%), basic deduction (KRW 2.5 million), and progressive rate applications.

25%

Value Added Tax & Framework Act on National Taxes (부가가치세법 및 국세기본법)

Evaluates advanced indirect taxation and foundational tax law principles: VAT taxable supplies and deemed supplies of goods (간주공급: 자가공급, 개인적공급, 사업상증여, 폐업시잔존재화); common input tax allocation for mixed taxable/exempt operations (공통매입세액 안분계산) and annual final settlement (정산); deemed input tax deductions for agricultural products (의제매입세액공제); bad debt tax credits (대손세액공제); Framework Act on National Taxes concepts including secondary tax liability (제2차 납세의무 of primary oligarchic shareholders and business transferees); priority of tax claims over secured civil claims; statutory assessment limitation periods (부과의 제척기간); tax collection extinction prescription (소멸시효); and administrative appeal procedures (이의신청, 심사청구, 심판청구).

Preparing for the Tax Accounting Level 1 (Korea) Exam

What You Need to Know

  • Passing score: At least 40 points in each of 세법1부 and 세법2부 and a combined average of at least 60 points
  • Assessment: 100-minute 필기시험 in two parts. 세법1부: 법인세법, 부가가치세법, 조세특례제한법. 세법2부: 국세기본법, 소득세법, 조세특례제한법. Each part is set as 객관식 15문항 + 주관식 5문항 + 약술형 2문항. Pass: at least 40 points in each part and a combined average of at least 60 points.
  • Time limit: 100 minutes
  • Exam / certification fees: KRW 25,000 (KACPTA 접수수수료 for 세무회계 all grades; 자격증 발급비 KRW 5,000 extra) Official sources

Using Our Practice Resources

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Tax Accounting Level 1 (Korea): Suggested Study Strategy

1Master the 4 Core Income Dispositions (소득처분): Always determine whether an adjustment has a balance sheet counterpart (유보/기유보), leaves the corporation to an internal stakeholder (상여 to officers/employees, 배당 to shareholders, 기타소득 to other individuals), or leaves externally with no clawback (기타사외유출 for corporate counterparties, fines, donations, and entertainment excesses).
2Memorize Tax Depreciation Limit Formulas (감가상각비 시부인): For buildings and intangibles, apply the straight-line method (정액법: 취득가액 × 상각률). For machinery and equipment under the declining balance method (정률법), apply: (취득가액 - 기초감가상각누계액 + 전기말 상각부인누계액) × 상각률. Deduct any current expense recognized on the books.
3Calculate Business Promotion/Entertainment Limits (기업업무추진비 한도액): Apply basic limit (KRW 36 million for SMEs, KRW 12 million for general corps) plus revenue bracket rates: 0.3% up to KRW 10 billion, 0.2% for KRW 10B–50B, and 0.03% above KRW 50 billion. Related-party revenue applies only 10% of these bracket rates.
4Understand Financial Income Comprehensive Taxation: Remember the KRW 20 million threshold. Below or at KRW 20 million, withholding tax at 14% (15.4% including local income tax) is final (분리과세). Above KRW 20 million, the excess is combined with other global income and taxed at progressive rates (6%–45%), and qualifying domestic dividends receive an 11% Gross-up (배당가산).
5Calculate VAT Common Input Tax Settlements: In the tax period of purchase, use provisional supply ratio: Common Input Tax × (Tax-exempt supply ÷ Total supply). At the second-period final return, calculate cumulative annual settlement and deduct previously allocated amounts.
6Know Secondary Tax Liability Criteria (제2차 납세의무): An oligarchic shareholder (과점주주) owns over 50% of outstanding shares (together with related parties) and exercises substantive managerial control. Their secondary liability is capped at: Corporation's deficient national tax × (Oligarchic shares ÷ Total issued shares).

Frequently Asked Questions

What is the Korea Tax Accounting Level 1 (세무회계 1급) qualification and who administers it?

Tax Accounting Level 1 (세무회계 1급) is the highest national accredited private qualification (국가공인 민간자격) in tax accounting in South Korea, administered by the Korean Association of Certified Public Tax Accountants (한국세무사회 / KACPTA). It certifies master-level practical and theoretical competence in South Korean tax law, encompassing corporate tax reconciliation, comprehensive individual income tax, VAT settlements, and national tax administrative remedies.

What is the examination format, duration, and passing score?

The official examination is an 80-minute written subjective paper (주관식 필답형/계산형) consisting of detailed computational problems and tax adjustment schedules. Candidates must achieve a score of at least 70 out of 100 points to pass. This OpenExamPrep bank adapts these computational problems into 100 single-choice questions with worked mathematical step-by-step solutions.

What are the eligibility requirements and registration fees?

There are no formal eligibility prerequisites regarding age, educational attainment, or nationality. The standard examination registration fee is KRW 25,000, payable during the national registration window on the official KACPTA licensing portal (https://license.kacpta.or.kr).

How does Level 1 differ from Level 2 and Level 3?

While Level 3 focuses on foundational tax theory and Level 2 covers standard corporate and individual tax adjustments, Level 1 tests advanced, complex tax scenarios including common input tax year-end settlements (공통매입세액 정산), secondary tax liability of oligarchic shareholders (과점주주의 제2차 납세의무), deemed rental interest (간주임대료), dividend gross-up, capital gains tax long-term holding deductions, and procedural tax appeals.

Why is this practice bank presented in English with Korean terminology?

This adaptation provides high-yield practice for international corporate controllers, bilingual tax practitioners, foreign accounting professionals, and candidates preparing for Korean tax qualifications while maintaining exact Korean statutory terms (such as 소득처분, 유보, 손금불산입, 공통매입세액, 제2차 납세의무) in parentheses to ensure seamless technical accuracy.