This study empirically analyzed whether the difference between accounting earnings and taxable income differs between Korea Stock Exchange (KSE)-listed firms and KOSDAQ-listed firms. It also examined whether the difference between accounting earnings and taxable income varies between the two markets depending on corporate governance structures. According to Cloyd et al. (1996), publicly traded firms face relatively higher capital market pressure compared to privately held firms. When capital market pressure is high, corporate managers have incentives to report accounting earnings that are higher than taxable income. The sample in this study consists of both KSE-listed and KOSDAQ-listed firms, all of which are publicly traded. However, even among publicly traded firms, differences in capital market pressure are expected between the two markets. The purpose of this study is to collect actual taxable income data from the corporate tax schedules in annual business reports of KSE-listed and KOSDAQ-listed firms, compare and analyze the differences between accounting earnings and taxable income across the two markets, and examine whether these differences vary according to corporate governance structures—particularly the largest shareholder's ownership stake—between the two markets. This study targeted firms listed on the KSE and registered on the KOSDAQ market in 1999 and 2000. The sample comprised 498 firm-year observations for KSE-listed firms and 513 firm-year observations for KOSDAQ-listed firms, limited to firms with December fiscal year-ends, excluding financial institutions. The empirical results indicate the following: First, KOSDAQ-listed firms showed a statistically significant positive difference between accounting earnings and taxable income compared to KSE-listed firms. That is, KOSDAQ-listed firms exhibited a stronger tendency to report accounting earnings higher than taxable income, while KSE-listed firms showed a stronger tendency to report accounting earnings consistent with taxable income. These results suggest that KOSDAQ-listed firms face higher capital market pressure compared to KSE-listed firms. Second, for the full sample, a statistically significant positive relationship was found between the difference in accounting earnings and taxable income and the largest shareholder's ownership stake. Furthermore, this positive relationship was observed to be more pronounced for KOSDAQ-listed firms than for KSE-listed firms as the largest shareholder's ownership stake increased. The results of this study indicate that the difference between accounting earnings and taxable income varies according to inter-market differences between KSE-listed and KOSDAQ-listed firms and corporate governance structures, particularly the largest shareholder's ownership stake.