The following tax information is translated from Korean for foreign-invested companies, and is not legally binding.
※ Year-end tax settlement by foreign workers in Korea
□ With the increase in foreigners residing in Korea1, the number of foreign
workers in Korea has increased every year2 as well.
○ For the convenience of foreign workers‘ year-end tax settlement in Korea, here are
a few tips on year- end tax settlement for foreign workers this year.
* 1) (’13)1,576,000 → (’14)1,797,000 → (’15)1,899,000 → (’16)2,049,000
2) (’13) 480,000 → (’14) 508,000 → (’15) 544,000 → (’16) 563,000
□ If a foreigner has wage and salary income generated in Korea, he/she
should perform year-end tax settlement just like domestic workers,
regardless of his/her sojourn period and amount of wage and salary income.
○ If the amount of tax withheld every month is larger than the year-end tax
settlement amount, the difference can be refunded. In this regard, foreigners
should perform year-end tax settlement even if their wage and salary income
| ※ Year-end tax settlement schedule (identical for both foreigners and
▪ Preparation of documents certifying income deduction and submission of return
(employee → company): Jan. 20-Feb. 28, 2018
▪ Issuance of year-end tax settlement withholding receipt (company→
employee): Jan. 20-Feb. 28, 2018
▪ Submission of withholding of income tax report and statement of tax payment
(company→National Tax Service): By Mar. 12, 2018
□ A foreign worker‘s year-end settlement schedule, method and deduction items are mostly identical to those of domestic workers.
○ However, special treatment in taxation such as the flat income tax of 19% and tax
reduction or exemption for foreign engineers applies only to foreigners, while some
deduction items such as housing fund deduction, housing purchase savings deduction,
monthly rent deduction do not apply to foreigners.
□ The National Tax Service provides various services to assist foreign workers‘
such as a help line for foreigners and an automatic calculation
service for year-end tax settlement in
| ▪ Customer satisfaction center (for foreigners): ☎ 1588-0560
▪ On-line consulting: www.nts.go.kr/eng > Help Desk > Q&A
▪ Automatic calculation program for year-end tax settlement (English)
* www.nts.go.kr/eng > Help Desk > Quick Viewer Service > Automatic Calculation
Service for Year- end Tax Settlement
A company purchased Olympics tickets to distribute them free of charge to
employees. In this case, can the ticket prices be considered deductible expense?
The expenses that a domestic company incurred for purchasing Olympic tickets
for free distribution to employees can be included in deductible expense when
calculating the income of the company’s each business year, in accordance
with Articles 19 (2) and 26 of the Income Tax Act.
Source: National Tax Service (Nov. 30, 2017)
If a retainer fee was paid to a legal representative, which year does the fee
become included in deductible expense?
If a domestic company paid or is planning to pay a retainer fee (limited to
fees without the right of return) to a legal representative of a
business-related law suit, such fee shall be included in deductible expense
of the business year in which the obligation for payment occurred in
accordance with the contract with the legal representative.
Source: National Tax Service (Dec. 11, 2017)
☞ For more information, please contact the International Tax Resource Management Office of the National Tax Service (82-44-204-2872~74).