South Korea endearingly called Korea by its occupants has encountered a fast monetary development rate in the course of recent many years. As a part of their attempt to pursue that development, Korea has added tax regulations that advantage ex-pats who choose to live and work there. Regardless of whether you are beginning an organization in Korea, teaching English in Korea, or a consultant, filing tax in Korea for foreigners can be muddled, particularly on the off chance that you can’t communicate in Korean.
The greatest issue most foreigners have is tracking down the correct accountant of tax who is knowledgeable in English and finding out a correct site that spreads out the strategy of filing tax in Korea for foreigners. This issue can be solved by following a website with the link taxinkorea.com which is totally in English and a complete guideline for foreigners.
Foreigners may need to follow the following five points for filing tax in Korea:
See if you even need to file your taxes in Korea
By and large, Korean inhabitants are burdened on overall pay. Non-occupants pay Korean tax just on the pay acquired and got in Korea. In the case that you are a salaried worker for an organization in Korea, undoubtedly your organization will file your taxes for your sake. Consequently, you need to see whether you are a salaried person or an independent contractor (freelancer). Sometimes, foreigners misunderstand the difference between being a salaried person or a freelancer. As a result of which they ended up being burdened with a lot of taxes. The tax office can force 5 years of past charges as the legal time limit for taxes are 5 years in Korea. For this reason, it is very important for you to first find out if you are a freelancer or not.
Here are some hints to which indicates that you are a freelancer in Korea:
- The taxes you are paying is around 3.3%
- You don’t get termination pay (severance pay)
- No medical insurance allowances.
Gather all of your pay-slips
Since you realize you are a self-employed entity or have an organization in Korea, the following stage is to ensure you keep every one of your pay slips. On the off chance that you didn’t, don’t stress because Korea has a solution platform called HomeTax. There you will discover a part called ‘MyNTS’ which will have every one of your pay-slips. This is your year’s end pay stub that will show your gross pay and retained duties. This report will likewise show how much cash was removed from your compensation for benefits and health care coverage. Or you can go to a local charge/tax office and demand a Certificate of Income.
If you made less than 15 million won the last year
On the off chance that you made fewer than 15 million won the tax filing procedure is simple. Filing tax in Korea for foreigners is extremely straightforward and simple. Simply take your ARC card to any tax office in Korea and they will direct you through your tax filing process by means of their stationed PC.
If you made more than 15 million won the last year
Those that made more than 15 million won, they need to make sure that if they have any deductibles? Are they single or have dependents? All these will finally tell that what amount of tax you will be ended up paying. It is dependent upon the representative to give their own allowances to decrease their repay.
Deductibles could comprise:
- Travel costs
- vehicle upkeep and fuel cost
- Food and refreshment
Choice to keep an accountant or to file your own charges in Korea
In the case that you need to employ an accountant for tax in Korea, research is must. Discover a tax accountant that will deal with the administrative work for you. At that point you should simply give the data and documents and the accountant will deal with the rest.
On the off chance that you are hoping to file tax on your own, you should go to your closest NTS (National Tax Service) office with your paystubs from your manager or the tax office. Make sure to bring your ARC card. The public authority there will take your ARC card and your paystubs and information the data into a PC. They will at that point tell you the amount you owe in taxes. You will actually be able to pay the tax sum there.
Concession for foreigners working in Korea
Foreigners who will begin to work in Korea no later than 31 December 2021 can apply for a flat tax rate at 19% on their business pay instead of the ordinary progressive income tax rates of somewhere in the range of 6% and 45%.
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