Penalties on withholding taxes

In Korea, withholding tax return is normally required to be filed every 10th of the following month. Also, a yearly report on the payments’ report which were subject to the withholding taxes are required to be filed once a year.

Failure to file and report the withholding taxes will result in following penalties.

Item Calculation Note
원천징수불이행가산세 (납부불성실가산세)

Penalty for failure to timely file withholding tax return

Max [(A+B), 10% of withholding tax payables]

A. 3% of withholding tax payables

B. 0.03% of interest penalties per day

  • 10% of the penalties will be levied as resident surtax
  • Penalty base is the unpaid withholding tax amount

Penalty for non-submission of yearly payment report

Non-reported gross payment amount x 1%


  • Penalty rate reduced from 2% -> 1% from FY2018
  • 50% deduction applies when the amended withholding tax return filed within three (3) months from the original filing due

written by USCPA in Seoul Song I Yoon (

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