Frequently asked questions
Q. Who should file a global income tax return?
Under global taxation the listed types of income are aggregated and taxed progressively; under separate taxation each item is taxed on its own. A resident is taxed on the aggregate of interest, dividend, business, wage & salary, pension and other income — but interest plus dividends of 20 million won or less, or other income of 3 million won or less, are taxed separately. If you have only separately-taxed income, withholding ends your obligation and no return is needed. Residents with globally-taxable income, and non-residents with a Korean business place or real-estate income, file in May of the following year. A resident or non-resident with only wage & salary income reported through year-end settlement need not file.
Q. I'm a US permanent resident on a 1-year E-2 contract as an ESL teacher; my family lives in the US. Am I a Korean resident?
Residency is not decided by nationality or permanent-resident status. In principle a person with a domicile in Korea, or a place of residence for 183 days or more, is a resident. You are deemed to have a domicile in Korea if you have an occupation that normally requires you to stay 183 days or more (a language instructor, for example), or if family sharing your livelihood is here. So even with your family abroad, you are a Korean resident.
Q. I'm American and want to run a business in Korea. Do I pay tax only on Korean income?
Residents pay tax on worldwide income; non-residents only on Korean-source income. If you are a Korean resident you pay tax on income from everywhere, including the US. A short-stay foreign resident (domicile/residence in Korea totalling 5 years or less in the past 10) is taxed on foreign-source income only to the extent it is paid in or remitted to Korea.
Q. I'm a private-institute English instructor leaving Korea this April. Must I file?
A resident who must file and who leaves to move abroad files for the taxable period of departure (Jan 1 to the departure date) before departure. If you leave between Jan 1 and May 31 you must also file the previous year's return before departure (e.g. entry 24.2.1, departure 25.4.30 → file both 2024 and 2025 before leaving). Get a business-income withholding receipt from the payer, bring it with your alien registration card, and get help from the tax office or a tax agent.
Q. I've worked in Korea 15 months. When and where do I file?
The tax year is the calendar year; the return is filed May 1–31 of the following year (next business day if the deadline is a weekend/holiday). A registered foreigner who moves must report the change to the new Si/Gun/Gu office or immigration office within 14 days; file with the district tax office having jurisdiction over your registered address.
Q. Is my institute pay wage & salary income, other income, or business income?
Under an employment contract → wage & salary income. A one-off lecture with no employment → other income. A freelancer providing lecture services continuously and repeatedly → business income.
Q. I work full time at an institute but I'm withheld as business income, not wage income. Is that unfair?
Whether income is wage & salary or business income turns on whether a valid employment contract exists — judged by whether you can refuse work, face time/place constraints, receive specific instructions, and must follow service rules. Check with your employer whether the employment contract is validly formed. The NTS cannot supervise private contracts; if you dispute it, consult the Local Employment and Labor Office or the Ministry of Employment and Labor (1350).
Q. The institute deducts about 3.3% of my pay each month. Is that reasonable?
Depending on the contract, an income earner is either an employee or an independent contractor (freelancer). Because hiring an employee creates a legal duty to enrol in the four social insurances, most foreign instructors are contracted as freelancers with 3.3% withholding. For a resident freelancer, the payer withholds 3.3% (incl. 0.3% local income tax) and you file in May, crediting the withheld tax; you get a refund if you overpaid or pay the difference if not. A resident employee is withheld monthly per the simplified tax table and settled at year-end. A non-resident employee is taxed like a resident employee; a non-resident giving lectures without employment is withheld at 22% (incl. 2% local tax). Tax-treaty short-stay exemptions may apply.
Q. How can I check that my 3.3% withholding is actually paid to the NTS?
The payer files a withholding statement by the 10th of the next month and submits a Statement of Payment for each earner by March 10 of the following year. Until that statement is filed, the NTS cannot show your individual withholding. However, the payer must issue you a business-income withholding receipt, which proves tax was withheld from your income regardless of whether the payer remitted it. Ask the institute to issue it.
Q. I'm a graduate student receiving research fees. Do I pay tax on this?
Pay to a researcher hired under an employment relationship is wage & salary income; research allowances received for temporary work with no employment are other income. Other income = gross revenue − necessary expenses (60% expense rate), withheld at 22% incl. local tax. If your annual other-income amount is 3 million won or less, withholding ends the matter. If it exceeds 3 million won, you must file in May and settle against the withheld tax.
Q. I started a job in August and also earn TV appearance fees. Do I file beyond year-end settlement?
The appearance fees (no employment) are other income. With only wage & salary income, year-end settlement ends your obligation. With other income too, you must combine both and file by May of the following year — unless your annual other-income amount is 3 million won or less, in which case you may either include it in your global return or let withholding at payment finalise it. At least 60% of temporary personal-service fees is a necessary expense, so 40% of the gross is the other-income amount; if that exceeds 3 million won a year, file.
Q. What counts as a necessary expense of business income? My own meals and rent?
Necessary expenses are costs directly incurred to earn revenue. Employees' meals and business premises rent qualify; your own meals and home rent are personal and do not. Typical necessary expenses: cost of raw materials/goods sold and incidentals; book value of transferred real estate (construction/development businesses); employee salaries; repair, management, maintenance and rent of business assets; depreciation of business fixed assets; interest on debt used directly to earn revenue; bad-debt losses; asset valuation losses; geological-survey and mineral-development costs; advertising and sales-support costs; donations and business-promotion expenses within limits; reserves and allowances; at-work sports and entertainment for employees.
Q. I already paid tax in my home country on income earned there. Can I credit it?
Yes — the foreign tax credit relieves double taxation where foreign-source income is included in a resident's global or retirement income and foreign tax equivalent to Korean income tax was paid or is confirmed payable. Credit limit = A × B ÷ C, where A = calculated global (or retirement) income tax for the year, B = foreign-source income (excluding the exempt portion), C = total global (or retirement) income for the year. Excess foreign tax can be carried forward for 10 years.
Q. My spouse and children live in my home country. Can I claim basic deduction for them?
It depends on whether you are a resident under the Income Tax Act, not on your citizenship. If you are a resident, dependents sharing your livelihood abroad qualify just as for a Korean resident. If you are a non-resident, you cannot take personal deductions for anyone other than yourself or special deductions.
Q. My parents live abroad. Can they be basic-deduction dependents?
If you are a resident and their combined annual income does not exceed 1,000,000 won, yes. If they are 70 or older, an additional 1,000,000 won deduction applies.
Q. My foreign spouse has no alien registration number. How do I claim spousal deduction?
If you are a resident and your spouse's annual income is 1 million won or less (gross wage & salary 5 million won or less if only wage income), spousal deduction is available. The spouse's personal details (alien registration or passport number) must be registered with the NTS: visit the tax office with documents proving the marriage and family relationship, the spouse's passport (if no alien registration card) and your ID, register the spouse as a taxpayer, and write the registered number on the return.
Q. I naturalized as Korean in 2025 and now have income under both my alien and resident registration numbers. Do I combine them?
Yes — file under your resident registration number reporting the total income for the year (pre-number income under the alien number plus post-number income). Because the NTS must identify you as the same taxpayer, bring an abstract of resident register stating the alien registration number and your ID to the tax office and request same-taxpayer identification.
Q. I've worked in Korea 3 years and have rental income from property in my home country. Report it here?
As a Korean resident you should also file and pay tax on overseas income. But for foreign-source income first arising on or after Jan 1, 2009, a foreign resident with domicile/residence in Korea totalling 5 years or less in the past 10 is taxed only on income paid in or remitted to Korea. If the rent was neither, you need not report it in Korea.
Q. My salary is paid in foreign currency from the US head office on the 20th each month. How do I convert it?
If paid before the agreed pay date, use the standard or arbitrage exchange rate of the actual payment date. If paid on or after the agreed pay date, use the rate of the agreed pay date.
Q. What documents do I attach to the return?
The finalized global income tax return; documents proving eligibility for personal and special deductions; documents needed to compute gross revenue and necessary expenses; for business income, the balance sheet, income statement, compound trial balance with attachments and statement of adjustment; and any other documents the authorities require. Documents not submitted must still be kept for 5 years.
Q. When will I get my refund?
If your determined tax is less than the pre-paid tax, the overpayment is refunded. Enter your Korean bank account in the refund-account field. Refunds are usually paid about a month after the filing period ends — around July 1 (national tax) and August 20 (local income tax). If you file the day before a permanent departure and a refund is due, it is transferred after departure, so keep Korean internet banking so you can move it abroad.
Q. I missed the deadline for my 2024 return. What now?
You may file a late return any time before the head of the tax office determines and notifies the tax base and amount. If you have not received a determination notice for 2024, file the late return with revenue and expense evidence attached. Late-filing and late-payment penalty taxes will apply.
Q. I over-paid because my 2023 return was wrong. How do I fix it?
If the declared tax base/amount exceeds what the law requires, you can request a correction within 5 years of the statutory deadline. For a 2023 return filed by May 31, 2024, submit Form 16-2 of the Framework Act on National Taxes with the reason and evidence by May 31, 2029. The office must notify the result within 2 months.
Q. I did year-end settlement like a Korean employee. Can I still switch to the flat tax rate?
Yes. If you did not submit the flat-rate application at year-end, you can attach the Application for Flat Tax Rate for Foreign Employees to the income-deduction report when filing the finalized return and submit it to the competent tax office. Under the flat rate, non-taxation, deductions, reduction/exemption and tax credits do not apply.
Q. Flat 19% rate vs. progressive rate — which is better for me?
The flat rate = gross wage & salary × 19% (non-taxable income is included and no deductions apply). Under the progressive rate, non-taxable pay is removed and your available deductions, reductions and credits apply. Which wins depends on your salary and the deductions/credits you qualify for — calculate both and compare.
Q. I'm a British engineer at a Korean company. Any tax benefit for foreign engineers?
A qualifying foreign engineer gets a 50% income-tax reduction on wage & salary income from services to Korean nationals, until the month 10 years after the first day of service (limited to service before Dec 31, 2026; 5 years for pre-2023 workers). Qualifying: a person providing technology under an engineering/technology-introduction contract of USD 300,000+; or a person with a bachelor's degree or higher in science/engineering/medicine, 5+ years' R&D experience (2 for PhD holders) at a foreign university/research centre, no relative or management-control relationship with the employer, working as a researcher; or outstanding foreign talent under the Special Act for Strategic Industries. Must not be a Korean citizen at year-end. File the exemption application (Tax Form 7) through the withholding agent by the 10th of the month after service is provided.
Q. I'm a US teacher at a Korean elementary school. Do I qualify for exemption?
Under the teachers' article of a tax treaty, income of a teacher or professor invited to teach or research at an authorized institution from a treaty country is exempt. English-speaking treaty partners with a teachers' article: USA, UK, South Africa, New Zealand, Australia, Ireland. Canada has a treaty but no teachers' article → taxable. Authorized institutions are schools under the Elementary and Secondary Education Act and the Higher Education Act. Submit the Application for Non-taxation and Tax Exemption under Tax Treaty (Tax Form 29-2(3)) to the payer, who forwards it to the district tax office by the 9th of the month after the first payment; attach a certificate of residence, a copy of the employment contract and other evidence.
Q. I've worked at a small private institute (hakwon) for 7 months. Am I exempt under Korea–South Africa treaty art. 21?
Article 21 exempts professors/researchers who are invited by a university, college, school or similar institution recognized as non-profit by the Korean government, to teach or research there, who were residents of South Africa, for up to 2 years from first arrival. A private institute (hakwon) is not such an institution, so remuneration for teaching there is taxable in Korea.
Q. Q&A for American teachers' exemption (treaty)
• If the invitation period exceeds 2 years, even the first 2 years are not exempt (same where the contract is cancelled during the period). • If your primary purpose in Korea is not teaching/research at an authorized institution (e.g. you moved from a hakwon), not exempt. • If you cannot attach the certificate of residence or file the application, tax is withheld; obtain the certificate later and, if you meet the requirements, claim a refund. • Providing lectures/research to a government-approved institution under a double contract with another such institution is still exempt. • After-school teachers hired at a principal's discretion through a dispatch company are not exempt if teaching/research is not the primary purpose of entry.
Q. I exercised stock options granted 3 years ago by my foreign parent company. Do I declare the gain?
Yes. Gains from stock-based compensation granted by a foreign parent to an employee of its Korean subsidiary/branch for services are wage & salary income (or other income if exercised/received after leaving the company). Declare the gain during the filing period for the same year, on the Statement of Wage & Salary / Pension / Other Income (page 11 of Form 40(1)), using income classification code 56 (or 60 for post-retirement exercise).