This paper analyzes the effects of domestic corporate tax policy on firms’ oversea direct investment (ODI) and employment. Apart from the previous tax policy literatures that examines the effects of foreign corporate tax policy on inward foreign direct investment (IFDI), this paper evaluates domestic corporate tax policy as a determinant for firms to invest abroad. Using Korean firm-level data, we measure domestic corporate tax rate as average effective tax rate and marginal effective tax rate for each firm and estimate their effects on firms’ ODI and employment. Our results show that both effective tax rates are positively and significantly associated with the amount of firms’ investment to their subsidiaries abroad. While firms’ ODI do not have significant effects on their domestic employment, we show that firms’ ODI induced by domestic tax rates have negative and significant effects on domestic employment. Our analysis implies that domestic corporate tax policy negatively and indirectly affects to firms’ employment through ODI.