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Understanding Korean Taxes in Korea

Key taxes for foreigners in Korea: income tax, VAT, and local income tax. Most employees have taxes withheld automatically.

Hard⏱ Variable (annual filing: 1–3 hours)

πŸ“‹ What You Need

  • β€’Tax ID (same as ARC number)
  • β€’Income documents from employer
  • β€’Hometax account

Step-by-Step Guide

1

Understand tax residency status

Foreigners residing in Korea 183+ days/year are tax residents and must report worldwide income.

2

Annual filing

Employees: Year-end settlement (연말정산) in February. Self-employed or freelancers: File comprehensive income tax by May 31.

3

Use Hometax (ν™ˆνƒμŠ€)

Korea's online tax portal with English support at hometax.go.kr.

4

Claim available deductions

Foreigners with E-7 or certain work visas can choose a flat 19% tax rate for first 5 years β€” often more beneficial.

πŸ’‘ Insider Tips

  • β†’Income tax rates: 6% (under β‚©14M) to 45% (above β‚©1B)
  • β†’Foreign workers can choose general income tax or flat 19% rate
  • β†’Tax treaties reduce withholding for many nationalities β€” check yours
  • β†’Consider hiring a tax accountant (세무사) β€” typical fee β‚©100,000–300,000
  • β†’VAT is 10% and already included in posted prices
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