The Constitutional Court of Korea ruled a provision of the Korean Income Tax Act defining the scope of benefits included in “earned income” as constitutional. The Court determined that the provision of the Income Tax Act, which defines earned income as “salaries, wages, remuneration, allowances, bonuses, and benefits of a similar nature received by providing labor,” does not violate the principle of clarity in tax requirements. (2024 HunBa 8384 and 2025Hyun100, etc.). Case Summary Decision of the Korean Constitutional Court on the Clarity of Earned Income Definition
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Amendments to the Korean Labor Standards Act: Break-Time Flexibility and Hourly Annual Leave
Recent amendments to the Korean Labor Standards Act introduce two important changes to the statutory framework governing working hours, rest periods, and annual paid leave. The amendments address long-standing practical issues arising from the rigid application of break-time rules and the absence of an express statutory basis for using annual leave in hourly units. The first amendment explained below permits employees who work exactly four hours to waive the statutory 30-minute break, provided the employee expressly requests to forgo the break. The second amendment, explained below, establishes
Continue readingDefinition of Personal Information Processor under Korean PIPA
The Supreme Court of Korea ruled that a person who obtains personal information through fraudulent or deceptive means and uses it for business purposes is also a “personal information processor” under Korea’s Data Protection Law. In April of 2026, the First Criminal Division of the Supreme Court upheld the lower court’s ruling sentencing a defendant to one year in prison for violating the Korean Personal Information Protection Act ( 2026do477 ) (“PIPA”). For an article on Statutory Damages for PIPA violations, please see: PIPA Violations Statutory Damages.
Continue readingSucceeding in Business in Korea by Tom Coyner Business Advisor for IPG Legal
Since 1977, I have observed the rise and fall of many foreign companies in South Korea. I have witnessed the trials and tribulations as a bank employee, a high-tech salesman, a country manager, and as a business consultant of foreign and Korean companies doing business in Korea. Bluntly speaking, while some foreign ventures have had some unlucky breaks, those companies that have succeeded in the Korean market have done so for good reasons. And those who have failed have done so largely because of their own inadequacies
Continue readingKorean Custom Clearance Jurisprudence at the Supreme Court of Korea: “Real Doll” Harm to Public Morals Case
The Supreme Court of Korea ruled that the withholding of customs clearance by a Korean customs office for the importation of “real dolls” into Korea was unlawful ( 2021du49857 ). The Korean customs office held that the prohibition was justified because, in its opinion, the dolls may harm “pubic morals,” and Korea’s Customs laws and jurisprudence permit prohibiting the import of goods that may harm public morals even without a substantiated iteration of an argument noting that the prohibition is likely to harm public morals. In South Korea,
Continue readingAre MOUs & LOIs Legally Binding in Korea? Enforceability of MOUs and LOIs under Korean Law
Foreign companies and individual investors entering the Korean market sometimes assume that a Memorandum of Understanding (MOU) is merely a non-binding document used to outline preliminary discussions and thus not enforceable under Korean Law. Under Korean law, that assumption is frequently wrong and sometimes leads to litigation and even criminal complaints being filed to the Korean Prosecution Services. An MOU in Korea may be fully enforceable, partially binding, or non-binding, depending not on its title but on its content, structure, the parties’ course of dealing, and their
Continue readingShall Korean Bonuses be Utilized for Calculating of Average Wages for Severance Payment Calculation Purposes?
The Supreme Court of Korea ruled that Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering)’s performance-based bonuses should not be considered wages for the calculation of severance payments under Korean Law. For additional articles on Korean Employment & Labor Law, see: IPG Legal’s Labor & Employment Law Archive On March 12, 2026, the Korean Supreme Court (2025da210219) upheld a lower court’s ruling in favor of the defendants in a lawsuit filed by 972 current and former Hanwha Ocean employees seeking severance pay based not only on salary
Continue readingDrafting & Negotiating Korean Joint Venture/Shareholder Agreements in Korea: Why Language, Governance, and Arbitration Clauses Matter
We have many clients who find it advisable to enter the Korean market through joint ventures with Korean partners. In many cases, this structure makes commercial sense: the Korean partner brings local market knowledge, relationships, regulatory familiarity, and operational experience, while the foreign partner contributes capital, technology, branding, and/or international distribution. However, joint ventures in Korea generate a disproportionate number of disputes involving foreign investors. In our experience advising multinational companies, many of these conflicts do not arise from bad faith or intentional misconduct. Instead, they arise
Continue readingTrade Secret Protection Act Crimes in Korea Clarified by Supreme Court of Korea
In a ruling that is important for technology companies, multinational employers, and cross-border R&D stakeholders, the Supreme Court of Korea (Third Criminal Division, January 15, 2025, 2025Do13231) held that the crimes of acquiring, using, and disclosing trade secrets under the Unfair Competition Prevention and Trade Secret Protection Act of Korea must be independently examined rather than analysed as a single course of conduct. This decision, arising from a high-profile semiconductor trade secret case involving a former Samsung Electronics executive and the alleged leakage of 18nm DRAM process
Continue readingStatutory Damages in Korea Under PIPA for Personal Information Data Breaches
A recent Korean Supreme Court decision has fundamentally reshaped litigation risk analysis under the Personal Information Protection Act (PIPA), particularly regarding statutory damages under Article 39-2(1) of PIPA. The following post is essential reading for CISOs and those entrusted with company data. Contrary to widespread assumptions in the compliance community in Korea, the Korean Supreme Court confirmed that: A personal information processor may avoid statutory damages by proving that the data subject suffered no compensable mental damage — even where a data breach occurred. This ruling is
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