SEJONG, Jan. 15 (Korea Bizwire) – South Korea’s tax agency said Tuesday that all foreign wage earners must file their year-end 2018 tax settlement by the end of next month, regardless of their nationality or length of stay.
The National Tax Service said some income deduction or tax credit items are not applicable to foreigners and recommended that they take advantage of special taxation schemes, such as income tax reduction and exemption.
The NTS said a foreign employee can choose to apply for a 19-percent flat tax rate for wage and salary income, including non-taxable income, received from the first date of providing service in South Korea to the taxable period, which ends within five years of that date.
In the case of foreign engineers who have signed a technology introduction contract, or engineers who work as researchers in a foreign-invested company, a 50 percent reduction of income tax is applied to wage and salary income for two years.
Foreign teachers and professors are exempted from income tax for a set period — in most cases, two years — if they come from countries with which South Korea has a taxation-related pact.
The NTS said 558,000 foreign employees filed income tax worth 770.7 billion won (US$688 million) for year-end tax settlement in 2017.