Taxes in Korea

For a foreign-origin resident living and working in Korea, the most direct taxes are 종합소득세 (comprehensive income tax / personal income tax) and social insurance premiums, alongside everyday VAT at 10%. Korea has signed tax treaties with around 90 countries, including the US, EU members, and Japan, to prevent double taxation.

Resident vs. non-resident

• Resident: A person with a domicile in Korea or a residence (거소) of 183 days or more. Worldwide income is taxed by Korea.
• Non-resident: Only Korea-source income is taxed by Korea.
• A Korean citizen who has lived overseas long term with no Korean domicile or residence may be classified as a non-resident.
• Foreign residents may elect a special regime for the first 5 years after entry under which only foreign-source income remitted to Korea is taxed (worth considering if you intend a long stay).

Comprehensive income tax — progressive rates (estimated 2026 — adjustable each year)

| Tax base | Rate | |---|---| | Up to ₩14M | 6% | | Up to ₩50M | 15% | | Up to ₩88M | 24% | | Up to ₩150M | 35% | | Up to ₩300M | 38% | | Up to ₩500M | 40% | | Up to ₩1B | 42% | | Over ₩1B | 45% |

• Separately, 지방소득세 (local income tax) adds 10% of the calculated tax (effective top rate 49.5%).
• Foreign workers may elect a flat 19% rate (with no separate deductions) for up to 20 years after entry. This may be advantageous at higher incomes — annual comparison is recommended.

Major deductions and credits

• 근로소득세 deductions (earned income deduction): Automatic by salary band.
• 인적공제 (Personal exemption): ₩1.5 million per self / spouse / dependent.
• 연말정산 (Year-end settlement): Settled in batch through the employer in January via 원천징수 reconciliation. Deductions for medical, education, donations, pension savings, credit-card spending, and more.
• 자녀세액공제 (child tax credit), 월세세액공제 (monthly-rent tax credit), and 소득세 reductions for SME youth employees, among others.

VAT and other taxes

• General consumer goods and services include 10% VAT in the price (shown on receipts).
• 취득세 (acquisition tax) on property purchases (1–12% progressive), 재산세 (property tax) annually, 종합부동산세 (comprehensive real estate tax) for high-value property holders, 양도소득세 (capital gains tax) on real estate sales gains.
• 지방세 (local taxes) including 주민세 (resident tax) are billed separately by your municipality.
• Inheritance and gift tax: 10–50% progressive. Foreign-origin residents should check whether an inheritance tax treaty exists with their home country.

From a foreign-origin resident's perspective

• All filings and refunds can be done at the National Tax Service's Hometax with an 외국인등록번호 (Alien Registration Number) or 주민등록번호 (Resident Registration Number). Some English guidance is available.
• Home-country income and overseas accounts (combined balance over ₩500 million) are subject to overseas financial account reporting — heavy penalties apply for non-reporting.
• The social security agreement and tax treaty are separate. Both must be checked against your home country to avoid duplicate burdens.
• After acquiring Korean citizenship, citizenship-based taxation by your home country (e.g. the US) is a separate matter — if you were a US citizen, consider the exit tax.

Things to watch

• Rates, deductions, and special regimes change each year through tax-law revisions.
• For complex income or significant overseas assets, consult a tax accountant or international tax firm.

Official guidance: 국세청 홈택스 (NTS Hometax), NTS English, Ministry of Economy and Finance — tax treaties