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Tax Support for Foreigners

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  • Tax Support for Foreigners

Income Tax Reductions for Foreign Engineers

The income earned by foreign engineers offering services in Korea is subject to a 50% income tax reduction for a period of ten years from the date they started offering services (limited to cases before December 31, 2023).
Foreign engineers engaged in materials, parts, and equipment businesses prescribed by Presidential Decree are subject to a 70% income tax reduction for a period of three years from the date they started offering services (limited to cases before December 31, 2023), and a 50% reduction for two years thereafter.

Special Taxation for Foreign Workers

The income tax on the income of foreign workers (including foreign executives or employees but excluding daily employed workers) earned from the date they started offering services until the taxable period (limited to cases before December 31, 2023), which ends within twenty years, may be calculated by multiplying the relevant earned income by 19%, instead of applying the general income tax rate. 

Foreign Workers at Regional Offices

The income tax on the income of foreign workers at regional offices prescribed by the Foreign Investment Promotion Act earned from the date they started offering services until the taxable period, which ends within twenty years, may be calculated by multiplying the relevant earned income by 19%.
* Special taxation also applies to foreigners who first begin to offer services in Korea after December 31, 2023.
* Related law: Article 18.2 of the Restriction of Special Taxation Act

Application of Special Taxation

Any foreign worker who intends to make a year-end settlement of earned income tax or file a final return of global income tax must submit a wage and salary income earner’s return on any income and tax deductions as well as an application for a flat tax rate for foreign workers (Attached Form No. 8 of the Enforcement Rules of the Restriction of Special Taxation Act)—as stipulated by the ordinance of the Ministry of Economy and Finance—to the withholding agent, the taxpayers’ union, or the head of the tax office with jurisdiction over the place of tax payment.
* Related law: Article 16.2 of the Enforcement Decree of the Restriction