Chapter Key Takeaways
| Core Domicile Criterion | Having an occupation requiring 183+ days in Korea or having immediate family/assets in Korea |
|---|---|
| 183-Day Residence Rule | Having a place of residence (거소) in Korea for 183 days or more in a tax year |
| Resident Tax Liability | Taxed on worldwide income (all income generated inside and outside Korea) |
| Non-Resident Tax Liability | Taxed strictly on Korea-source domestic income only |
| 5-Year Short-Term Resident Rule | Foreign residents residing in Korea ≤ 5 years out of past 10 years are exempt from foreign income tax UNLESS paid in or remitted to Korea |
| Personal Deductions | Residents receive full basic/dependent deductions; Non-residents receive basic deduction (1.5M KRW) only |
| Tax Treaty Tie-Breaker | Permanent home, center of vital interests, habitual abode, nationality |
1. Definition of Tax Resident vs Non-Resident in Korea
Under Article 1-2 of the Korean Income Tax Act, taxpayers are categorized into two fundamental statuses:
| Classification | Legal Definition & Conditions | Scope of Taxable Income |
|---|---|---|
| Resident (거주자) | An individual who has a domicile (주소) in Korea, or has had a place of residence (거소) in Korea for 183 days or more. | Worldwide Income: All income derived from both Korean sources and overseas foreign sources. |
| Non-Resident (비거주자) | An individual who is not a resident (e.g. temporary visitors, short-term consultants under 183 days without Korean domicile). | Domestic Source Income Only: Income strictly generated within the Republic of Korea. |
A foreigner is deemed to have a domicile in Korea if they hold an occupation (e.g., an employment contract of 1 year or longer) that typically requires staying in Korea for 183 days or more, regardless of whether their family accompanies them.
2. The 5-Year Short-Term Foreign Resident Rule (Overseas Income)
One of the most important tax reliefs for expatriates and foreign workers is the Short-Term Foreign Resident Exception (소득세법 제3조 제1항 단서):
Where a foreign resident's total period of having a domicile or residence in Korea is 5 years or less in the aggregate during the past 10-year period ending on the last day of the tax year:
• Overseas-source income (foreign salary, foreign rental, dividends, interest from home country) is TAXED IN KOREA ONLY IF paid within Korea or remitted into Korea.
• Foreign income kept in overseas bank accounts and not remitted into Korea is COMPLETELY EXEMPT from Korean income tax.
Once a foreigner has resided in Korea for more than 5 years out of the preceding 10 years, they become a permanent tax resident, meaning their worldwide income must be reported on their May tax return regardless of remittance.
3. Tax Deductions: Resident vs Non-Resident Comparison
Your residency classification directly impacts which income deductions you can claim on your tax return:
- Resident Foreigners: Entitled to the Basic Personal Deduction (1.5M KRW), Spouse & Dependent Deductions (1.5M KRW each), Pension Account Credits, Special Income Deductions, and Standard Tax Credit.
- Non-Resident Foreigners: Allowed only the individual Basic Deduction of 1.5 million KRW. Spouse, dependent deductions, housing savings deductions, and special tax credits for medical/education are disallowed under Article 122 of the Income Tax Act.
Frequently Asked Questions
Official NTS Foreigner Tax Guide Series
Explore all 6 chapters compiled from the 2026 National Tax Service Individual Income Tax Guide for Foreigners:
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