Korean Tax System: How to File Taxes as a Foreigner
Filing taxes in South Korea as a foreigner may seem daunting, but understanding the Korean tax system makes the process straightforward. Whether you're an expat employee, freelancer, or business owner, knowing how to file taxes in Korea helps you avoid penalties and maximize tax benefits. This guide covers income tax filing, tax rates, deductions, and deadlines to help you comply with South Korea's tax regulations.
Do Foreigners Need to Pay Taxes in Korea?
Yes, foreigners who work or earn income in Korea must pay taxes. Your tax obligations depend on your residency status:
✔ Residents (stay over 183 days/year)– Taxed on global income(income from Korea and abroad)
✔ Non-Residents (stay under 183 days/year)– Taxed only on Korea-sourced income
Understanding Korean Income Tax Rates (2025)
Korea uses a progressive income tax system— the higher your income, the higher your tax rate:
| Annual Income (KRW) | Tax Rate |
|---|---|
| Up to 14 million | 6% |
| 14M - 50M | 15% |
| 50M - 88M | 24% |
| 88M - 150M | 35% |
| 150M - 300M | 38% |
| 300M - 500M | 40% |
| Over 500M | 42% |
✔ Local Income Tax: Additional 10% of your national tax applies
✔ Tax Withholding: Employers automatically deduct taxes from salaries and submit them to the government
How to File Taxes in Korea as a Foreigner
Step 1: Gather Required Documents
✔ Alien Registration Card (ARC)
✔ Certificate of Income (근로소득원천징수영수증)from employer
✔ Tax deduction documents(insurance, rent, education, donations)
✔ Bank statements (if needed for deductions)
Step 2: Choose a Filing Method
✔ Online (Hometax)– Korea's Hometax website(http://www.hometax.go.kr)) for electronic filing
✔ Offline (Tax Office)– Visit the local tax office for in-person assistance
✔ Through Employer– Many companies handle tax filing for employees
Step 3: Submit by the Deadline
✔ Annual Income Tax Return Deadline: May 31st each year
✔ Tax Refunds: If you've overpaid, you can request a tax refund
Tax Deductions & Benefits for Foreigners
✔ Flat Tax Rate Option: Eligible expats can choose a 19% flat tax rate instead of progressive rates
✔ Deductions: Available for health insurance, national pension, housing rent, and education expenses
✔ Foreign Earned Income Exclusion: Qualified foreign professionals may exclude certain income from taxation
✔ Pension Refund: National Pension Service (NPS) contributors may be eligible for a refund when leaving Korea
Corporate & Freelancer Taxation
✔ Freelancers (Self-Employed)– Must file quarterly VAT returns and annual income tax
✔ Small Business Owners– Subject to corporate tax rates(10%–22%)
✔ Tax ID (사업자등록증)– Required for business owners and full-time freelancers
Common Tax Mistakes & How to Avoid Them
❌ Missing the Deadline– Results in penalties
❌ Ignoring Deductions– Overlooking available deductions increases your tax burden
❌ Not Checking Tax Residency– Your tax rate & filing obligations depend on your length of stay
❌ Not Keeping Records– Maintain receipts and tax documents for at least 5 years
Need Help? Where to Get Tax Assistance
✔ National Tax Service (NTS): Call 126 for English assistance
✔ Tax Help Centers for Foreigners: Find free tax help at expat support centers
✔ Professional Tax Consultants: Consider a tax accountant for complex situations
Filing taxes in Korea as a foreigner becomes simple once you understand the rules. Knowing your tax obligations, deductions, and filing methods helps you save money and avoid penalties. Whether you're an employee, freelancer, or business owner, following South Korea's tax laws ensures a smooth experience.
Need assistance? Visit Hometax or the National Tax Service (NTS) for help!
