	Press Release			Please release this report starting with the morning edition on Wednesday, July 16, 2008

Get All the Help You Need on Solving Your Korean Tax Issues Here! - Rollout of 「Foreign Taxpayer Service Desk」and Publication of 「Foreign Taxpayers' Guide to Korean Taxes」

The foreign taxpayer community and its economic activities in Korea have grown rapidly in recent years as a result of increased foreign capital investment driven by the opening of Korea’s foreign currency and capital market.

The number of foreign taxpayers who have settled their taxes through year-end tax settlement on their 2007 wage and salary income grew 168% from 2001 to 287,075; while those who have filed global tax returns on their 2007 income increased 328% over the same period to 13,699.

As minimization of foreign taxpayers’ inconvenience arising from language and cultural differences becomes important in promoting the continued growth of foreign investment, the NTS installed "Foreign Taxpayer Service Desks" first as a pilot at Taxpayer Service Centers in 10 district tax offices (DTO's) located in areas with the greatest foreign taxpayer demand for tax services. As of July, this was rolled out to 30 DTO’s.

Also, "Foreign Taxpayers’ Guide to Korean Taxes," which is the NTS’s first English-language collection of the most frequently asked questions and their answers, was published to guide foreign taxpayers through their Korean tax obligations.

□ Number of Foreign Taxpayers Filing Global Income Tax Return and Year-end Tax Settlement

(Unit: Persons, KRW 100 million)

Tax Year		2001	2003	2005	2007	Growth Rate (’07/’01)
Global Income Tax Return	Persons	3,201	6,018	8,691	13,699	328%
	Taxes reported	443	694	678	1,187	168%
Year-end Tax Settlement	Persons	107,622	148,853	223,042	287,075	168%
	Taxes reported	1,448	1,762	1,776	2,242	55%

※ Source : Statistical Yearbook of National Tax, NTS

- Rollout of "Foreign Taxpayer Service Desk" -

The NTS has provided communication channels foreign taxpayers may use to place questions and seek answers to tax problems at the NTS English website (http://www.nts.go.kr/eng) and NTS English Assistance Hotline (Tel: 02-397-1440). In February 2008, "Foreign Taxpayer Service Desks" were installed at Taxpayer Service Centers of 10 DTO’s located in areas having the greatest demand for English assistance. Driven by a successful pilot run, "Foreign Taxpayer Service Desks" were rolled out to the next 20 DTO’s starting July of this year to better service their tax needs.

* Foreign Taxpayer Service Desks were particularly well-received by the American Chamber of Commerce (AMCHAM) and foreign workers and foreign companies in the Gumi Industrial Complex (See to Attachment 1).

The rollout to 30 DTO’s means that, now, approximately 2/3 of all foreign taxpayer needs will be serviced by a "Foreign Taxpayer Service Desk" assistant.

□ DTO’s that Offer "Foreign Taxpayer Service Desks"

RTO*	Pilot DTO's (Feb. 18, ’08)	Newly Added DTO's (July 1, '08)	Total
Total	10	20	30
Seoul	Yongsan, Samseong, Seocho, Yeoksam (4)	Gangnam, Guro, Geumcheon, Namdaemun, Mapo, Seodaemun, Seongdong, Songpa, Yeongdeungpo, Jongno, Jungbu (11)	15
Jungbu	Ansan (1)	Seongnam, Suwon, Uijeongbu, Incheon, Pyeongtaek (5)	6
Daejeon	Seodaejeon (1)	Cheonan (1)	2
Kwangju	Mokpo (1)	Seogwangju (1)	2
Daegu	Gumi (1)	SeoDaegu (1)	2
Busan	Busanjin, Changwon (2)	Suyeong (1)	3

* RTO : Regional Tax Office

□ Number of Foreign Taxpayer Requests Processed (for 2007)

(Unit: Number, %)

	Total	New/Changed Business Registrations	Certificates Issued
			Tax Clearance Certificate	Certificate of Tax Payment	Certificate of Income	Certificate of Business Registration	Certificate of Business Suspension /Close of Business	Others
Total ①	39,051	8,451	6,110	5,646	5,520	4,941	932	7,451
30 DTO's②	25,490	5,057	4,040	4,065	3,462	3,320	593	4,953
Rate (②/①)	65.3	59.8	66.1	72.0	62.7	67.2	63.6	66.5

※ Source : NTS

The NTS plans to further expand service areas, based on foreign taxpayers’ needs for English-language service.

- Publication and Web Posting of "Foreign Taxpayers’ Guide to Korean Taxes" -

"Foreign Taxpayers’ Guide to Korean Taxes," containing the most frequently asked foreign taxpayers’ questions and corresponding answers, will be distributed to companies hiring foreign workers and foreign chambers of commerce in Korea, among others. The NTS’s first publication in the form of Q&A’s will be posted on the NTS Korean website as well as on the English website, so that not just foreign employees/expats, but their Korean employers/payers may also benefit from the service.

How to download your electronic copy of "Foreign Taxpayers’ Guide to Korean Taxes"

- NTS Korean website : www.nts.go.kr ⇨ Tax Information ⇨ NTS Publications ⇨ Tax Laws Explained & Q&A’s

- NTS English website : www.nts.go.kr/eng ⇨ Resources ⇨ Publication

"Foreign Taxpayers’ Guide to Korean Taxes" explains in both English and Korean the tax obligations of foreign earners of income. A few summarized examples from the book are:

Question (1)		Tax Incentives for Foreign Employees
To take account of the extra expenses incurred from a foreign employee’s overseas employment in Korea, he/she may choose from one of the two methods below that creates a lighter tax burden: (1) Non-taxation treatment on 30% of gross earnings. Payable taxes are calculated by applying income tax rates (8%-35%) prescribed under the Personal Income Tax Law. * Gross earnings: Total income from employment less qualifying non-taxable income as prescribed under the Personal Income Tax Law (2) Separate taxation of total income from employment by multiplying such income by a 17% flat rate

Question (2)		Taxation on a General* ESL Teacher’s Income Paid by a Private Language Institution (Hakwon)
If service is provided under an employment contract, income tax is withheld each month from monthly pay applying the Simplified Tax Withholding Table. Tax liabilities are settled and finalized through year-end tax settlement completed in February of the following tax year. If service is provided as an independent contractor ("free-lancer") who is expected to reside in Korea for one or more years, the payer ("withholding agent") must withhold at a rate of 3.3% (resident surtax included) at each time of payment. The independent contractor then must file an income tax return in May of the following tax year. If service is provided as an independent contractor ("free-lancer") who does not have resident status in Korea, payment in return for such service is treated as "other income," and tax liabilities are settled and finalized through the payer’s withholding at a rate of 27.5% (resident surtax included). However, such income shall not be taxable in Korea if treaty eligibility requirements for non-taxation (e.g., short-term residence test) are met. * Instructors having "general status" are persons delivering knowledge and do not possess license(s) or professional knowledge (e.g., persons who are not delivering knowledge as professors, lawyers, accountants, etc.).

Question (3)		Deduction for Foreign Employee’s Wage and Salary Income
Resident foreign employees are allowed the following deductions at the time of year-end tax settlement or income tax return filing, in the same manner as applied to Korean residents: - Deduction for dependents - Deduction for education expenses - Deduction for charitable donations - Special deduction for marriage, funeral services, moving expenses, etc. Persons of foreign nationality may also obtain a Cash Receipt card. Foreign employees are allowed to take a deduction for certain amounts that have been issued Cash Receipts*. * Refer to <Attachment 2> for more information on how to create an account for and use Cash Receipts.

Question (4)		Foreign "Business Operator’s" e-Filing and Certificate Issuance Through Hometax
Foreigners can file VAT and global income tax returns through the NTS Internet-based Hometax service*. They may also be issued various tax certificates, such as the Certificate of Tax Payment. * 1) Refer to <Attachment 2> for more information on how to create an account for and use a Hometax user account. * 2) Refer to <Attachment 3> for types of certificates available through Hometax.

Foreign taxpayers in Korea are invited to take full advantage of the "Foreign Taxpayer Service Desk," "NTS English Assistance Hotline," and "English website Q&A," or refer to "Foreign Taxpayers’ Guide to Korean Taxes" for assistance on how to fulfill their Korean tax obligations.

<Attachment 1> Letter from AMCHAM Korea and Feedback by the Daegu Chamber of Commerce

<Attachment 2> How to Create and Use Cash Receipt & Hometax User Account

<Attachment 3> Most Frequently Used Tax Certificates By Foreigners

<Attachment 4> Taxpayer at Foreign Taxpayer Service Desk

Publication Date		Tuesday, July 15, 2008		Drafting Division	International Tax Resource Management Division
				Assistant Commissioner In Charge	Mr. Kang, Seong Tae (Tel: 82-2-397-1409)
Director In Charge		Mr. Suh, Jin Oog (Tel: 82-2-397-1431)		Deputy Director In Charge	Mr. Seo, Jae Ryong (Tel: 82-2-397-1432)

Attachment 1 Letter from AMCHAM Korea and Feedback by the Daegu Chamber of Commerce

□ E-mail Letter from AMCHAM Korea (June 26, 2008)

“AMCHAM Korea is absolutely delighted at the new initiatives the National Tax Service (NTS) is making to improve the quality of its services for its foreign customers.

Tax issues can be a cause for concern but they can become even more burdensome if additional worries such as language barriers and lack of sufficient information exist.

The introduction of more English speaking agents by the NTS and its aim to focus on the major needs of the foreign community is a great way to tackle these issues head on, and AMCHAM fully supports and wishes the NTS every success as it begins to implement such positive changes.”

□  Feedback by the Daegu Chamber of Commerce at the NTS-Daegu Chamber of Commerce Meeting (June 19, 2008)

"The Gumi District Tax Office has tax experts assigned at its Taxpayer Service Center giving tax advice to foreign companies and foreign employees.

This is helpful to the many foreign employees and companies in the Gumi area and is also a practice befitting an organization striving to achieve a「world-class tax administration」and 「globalized tax administration」."

Attachment 2 How to Create and Use Cash Receipt & Hometax User Account

□ Foreign Taxpayers’ Creation and Use of Cash Receipt User Account

○ Eligibility

- Foreign persons registered at the NTS Tax Integrated System

○ How to create a user account

- Enter your Foreign Registration Number or passport number at the Cash Receipt website (www.taxsave.go.kr)

○ How to create and register a newly-issued Cash Receipt card

- Submit application form at the Cash Receipt website

-  Register your Cash Receipt card number, mobile phone number, or credit card number to accumulate Cash Receipt-issuance amounts under your account

□ Foreign Taxpayers’ Creation and Use of Hometax User Account

○ Eligibility

- Foreign persons registered at the NTS Tax Integrated System

○ How to create a user account

- Visit your nearest district tax office and submit an application form at the Taxpayer Service Center with proper identification, or create one at the Hometax website using your digital certification of identification.

○ Services available via Hometax (www.hometax.go.kr)

- e-Filing of returns (e.g., corporation tax, global income tax, VAT, etc.)

- e-Payment of taxes (on electronically declared taxes, assessed taxes, delinquent taxes, etc.)

- e-Issuance of certifications (Certificate of Business Registration, Certificate of Business Suspension/Close of Business, Tax Clearance Certificate, Certificate of Tax Payment, Certificate of Income, etc.)

※ A digital certification of identification is required for e-payment and issuance of Certificate of Tax Payment and Certificate of Income.

Attachment 3 Most Frequently Used Tax Certificates By Foreigners

○ Tax Clearance Certificate :

Document verifying that there are no overdue taxes.

○ Certificate of Tax Payment

Document verifying tax payment for a period specified on the document.

○ Certificate of Income

Document verifying a taxpayer's having certain amounts of income in specified years. This is issued if income had been declared by year-end tax settlement or global income tax return filing.

○ Certificate of Business Registration

Document verifying a taxpayer's registration of his/her business.

○ Certificate of Close of Business

Document verifying that a business had been closed.

Attachment 4 A tax official giving advice to a foreign visitor at the Foreign Taxpayer Service Desk (Yongsan District Tax Office)