VAT is levied at a rate of 10% on the supply of goods and services, except zero-rated VAT on certain supply of goods and services (i.e. services rendered to non-residents earning foreign currency, etc.) and exemption on certain goods and services (e.g. basic life necessities and services, such as unprocessed foodstuffs and agricultural products; medical and health services; finance and […]
Author Archives: koreantaxexpert
Under the Korean Commercial Law and related tax laws, a company is required to keep its accounting records using “double-entry” bookkeeping system, and prepare financial statements and maintain them for at least five (5) years. Also, once you start a business in Korea, you would be required for following reporting requirements : Value Added Tax […]
Article 156-7 (1) of the Income Tax Act, Article 207-10 (1) of the Enforcement Decree of the Act □In order to tighten control on the tax source from foreign dispatched workers, the following revisions will be made: ○Expansion of scope of withholding agents: -Current: A domestic company whose total payment in return for labor provided […]
Filing due: May 31 for the previous year’s tax report Who should file: Tax resident or Non-resident, whoever there was income generated in Korea Exempted from filing: Any resident falling under any of the following may choose not to file a finalized return of the tax base of the relevant income (Article 73 (1) of […]
Under the Income Tax Act Article 165-2 (Duty to Submit Documents about Overseas Investment or Real Estate), a Korean tax resident is required to report and submit certain documents to the Korean tax authority on a yearly basis – by end of May every year. Types of documents to submit to the Korean tax authority […]
You must be either tax resident or non-resident for Korean income tax purposes. From 2015, the relevant tax law changed, the major condition to be a resident in Korea was dramatically tightened up. Under the Enforcement Decree of the Income Tax Act (EDITA) Article 4, if the duration in which a person had a place […]
Transfer Pricing refers to the pricing of international transactions between two “associated” enterprises. Due to the special relationship between related parties, the transfer price may be different than the price that would have been agreed between unrelated parties. A price between unrelated parities is known as the “arm’s length” price. Under Korea’s transfer pricing rules, […]
South Korea, officially the Republic of Korea, is a country in East Asia, constituting the southern part of the Korean Peninsula. South Korea shares land borders with North Korea to the north, and oversea borders with China to the west and Japan to the east. It has estimated 50 million residents distributed over 38,375 sq […]
From 1 January 2017, eligible foreigners claiming the flat tax rate will be subject to 20.9% tax (i.e. 19% income tax and 1.9% local income tax) on their employment income sourced in Korea. The rate is an increase from 18.7% (17% income tax and 1.7% local income tax) which was effective until 31 December 2016.Eligible […]
From 2018, the top marginal income tax rate has increased from 40% to 42%. In addition to the individual income tax, local income tax (resident surtax) is assessed at 10% on the income tax liability. Tax Base (in KRW) Tax Rate for 2017 Tax Rate for 2018 Under 12,000,000 6% 6% 12,000,000 ~ 46,000,000 15% […]
Korean social security system consists of national pension, national health insurance, unemployment insurance and workplace injury insurance. Except for some special cases, it is mandatory to enroll for those social securities in Korea for the salaried employees. The social security contributions are subject to be withheld when salary income is paid. For 2018, Korean social […]
We receive so many questions on this. The relevant Korean Income Tax Law specifically describes the types of business and other income. Types of Business Income (Article 19, Income Tax Act) Income from agriculture, forestry and fishing businesses Income from mining and manufacturing businesses Income from electricity, gas, steam and water supply businesses Income from […]
Under the Article 59-5 of Korean Income Tax Act, one of the following salary income is subject to tax exemption. Application of the tax exemption needs careful calculation, thus you may need to seek for tax advice on this. Wage & salary that a foreigner dispatched to Korea under an inter-governmental agreement Income earned from […]
Taxation on Foreign Source Income Should you report income generated overseas? Under South Korea’s Income Tax Act, individuals are categorized as either a resident or non-resident for tax purposes, depending on which the scope of taxable income and method of taxation differs. Residents are subject to income taxation for all income that have accrued in […]
Korean global income tax return filing is due May 31, 2018. If you have income earned during 2017 in Korea and depending on your Korean tax residency test, you may need to file income tax return in Korea. Key factors for Korean income tax filings are listed below. 1. You need to see if you […]