Introduction: In South Korea, the tax settlement process for resigned employees involves several important steps. While specific details may vary, for the purpose of this blog, let’s assume that the employee’s salary and bonuses have been finalized. This article will cover the key aspects of the tax settlement process that every resigning employee should be […]
Author Archives: koreantaxexpert
I have been working as a USCPA in Korea for over 15 years, primarily assisting foreign companies looking to start businesses in Korea. After assisting with the establishment of their corporations, I provide advisory services and various compliance services, including tax reporting within Korea. I would like to offer some brief advice on a few […]
27
Mar
Mar
VAT Korea Refund In the global economy, international trade in goods & services have expanded to become essential to daily life. It has become common to make purchases and use popular global apps in South Korea. However, such goods or services from overseas suppliers do not include VAT, which creates an unequal playing field for […]
15
Mar
Mar
A tax is imposed on net taxable income in Korea by the district tax office, and cities (or “gu” for large cities). In Korea, a tax payable to the district tax office is called “income” tax (소득세). A tax payable to cities is called “resident” tax (지방세). For most of cases, 10% resident tax will […]
15
Jan
Jan
South Korea’s payroll system When an employee is hired, he/she will receive monthly salary payments that will have taxes deducted from. Employees must pay income/resident taxes from their salary along with mandatory social insurance programs that employees need to be enrolled into immediately upon being hired. Withholding Income & Resident Taxes Plus Benefit Deductions Income/resident […]
28
Aug
Aug
Business in Korea | Company types Foreign investments are categorized by type for doing business in Korea. Mostly, foreigners can start Korean business by acquiring new or existing stocks, or by establishing a Korean branch or liaison office in Korea. Governing laws are different for the cases. Foreign Direct Invested (FDI) companies are domestic corporations […]
Can foreigners hire Korean employees remotely? Yes, any foreigners or foreign companies can hire Korean national employees from overseas. Many foreigners or foreign companies I’ve met are worried about the Korean labor environment and hesitate to set up a company in Korea. For certain cases, Koreans can be directly employed by any foreigners and work […]
28
Aug
Aug
In South Korea, Foreign Direct Investment (FDI) requires an investment by non-Koreans of at least KRW 100 million. Types of FDI include the acquisition of stocks of domestic companies, long-term loans (minimum of five years) from parent companies outside of South Korea, and investments in non-profit corporations in the fields of science & technology. And […]
The Korean VAT Laws specify certain purchases are not deducible (10% VAT not refundable) for the companies. For example, VAT payments on following purchases are not refundable: Books, medical expenses, fuels, parking, car maintenance fees, leisure expense such as golf, etc., luxury item purchases, public transportation expenses, tickets (i.e., movies), beauty shops, etc. References: […]
Sometimes we are asked for financial review services Korea. Unlike audits, financial reviews require much simpler procedures and can take less time than audits. A review includes primarily applying analytical procedures to management’s financial data. You may expect that a CPA review will address if the financial data are free from any material misstatements. Key […]
Korean tax authorities have been raising income tax rates for individual taxpayers in recent years. It is a common practice for high income earners setting up an entity in Korea to reduce taxes. There will be many things to consider before setting up an entity in Korea, but only comparing tax rates, it will be […]
13
Apr
Apr
Last month we took a look at the many different types of audits that Korean tax officials have at their disposal. Just learning to understand the different types of tax audits will help you learn to avoid them, but here we’re going to make sure that you understand exactly how a business or individual […]
06
Mar
Mar
Two words that send a jolt of fear into every law-abiding citizen: “Tax Audit.” Over the next month we are going to share a few articles that help you understand what the South Korean tax audits are, how the government determines when they will be implemented, and how to avoid them in the future. […]
09
Jan
Jan
Death and taxes. The two things in life you can never avoid. No one enjoys paying their taxes, but Korea’s incredible infrastructure doesn’t build itself, right? The important thing, however, is that you don’t pay more taxes than necessary. Let’s be clear here: this is not tax evasion. That’s when you avoid taxes that you […]
18
Dec
Dec
A Guide to South Korea’s 4 Social Insurance Programs South Korea’s Social Welfare Policy & the “Safety Net” Every developed country has systems set up to make sure that people are taken care of in the event of certain challenges and time periods. European countries are famous for their strong social safety net, but Korea […]