국세청	Press Release- Reference Material

Press Release	12:00 pm, Wednesday Jan. 18, 2023	Released on	10:00 am, Wednesday Jan. 18, 2023

Drafting	International Taxation Bureau	Director	Jae Hoon Ban	(044-204-2801)
Division	International Taxation Division	Deputy Director	In Young Ko	(044-204-2822)

Foreign Employees’ Year-end Tax Settlement for Income Attributable to 2022

- Short-form video guide with English, Chinese, and Vietnamese subtitles can be helpful -

□  Foreign employees should settle year-end taxes in the same way as domestic employees no later than the date on which wages for this year February are paid.

* No. of foreign employees settle year-end taxes : (’20) 545,000 → (’21) 505,000

○  There are special taxation regulations that apply only to foreigners such as the application of the 19% flat tax rate and income reduction/exemption for foreign engineers.

○  However, because foreigners are not qualified as the household head pursuant to the Resident Registration Act, they are not eligible for income deduction for savings for housing purchase among housing-related deductions*.

* Income deduction for housing funds, income deduction for savings for housing purchase, tax credit for monthly rent payments

□  The National Tax Service (NTS, Commissioner Changki Kim) provides information to foreigners through various media to make it more convenient for foreign employees to settle their year-end taxes.

○  As in previous years, for more detailed information on year-end tax settlements, foreign employees can check Easy Guide to Year-end Tax Settlement provided on the NTS English website or call the NTS English hotline for foreigners(☎1588-0560).

○  This year, to help foreign employees who are not familiar with Korea’s year-end tax settlement process, a short-form video guide to year-end tax settlement (English, Chinese and Vietnamese subtitles) is provided through YouTube and the NTS English website.

□  The year-end tax settlement guide service for foreigners provided online can also be accessed through the mobile English website.

○  The NTS will continue to further improve the year-end tax settlement filing and support system for foreign employees.

1		Foreign Employees Should Settle Year-end Taxes

□  A foreign employee (excluding daily workers) who has wage & salary income in Korea in 2022 should settle year-end taxes just like Korean employees no later than the date on which wages for February 2023 are paid*, regardless of his/her nationality, period of stay, and amount of income.

* If there is no wage & salary income for February or it is not paid by the last day of February, the last day of February shall apply.

○  A foreign employee should submit the report of income deduction and tax credit and supporting documents to the employer company that is the withholding agent, and he/she should pay the excess income tax or receive refund based on the finalized income tax for wage & salary received for the past year.

| Year-end tax settlement schedule |

□  After a foreign employee submits an application for provision of simplified year-end tax settlement data to the employer and the employer reviews the documents, the NTS provides the relevant data on the foreign employee just like Korean employees to the employer.

○  The withholding agents (employers) are recommended to use the foreign-language guides* provided by the NTS so that foreign employees who are not fluent in Korean can settle year-end taxes without difficulty.

*  Easy Guide to Year-end Settlement (Korean & English)

Year-end tax settlement manual and short-form video guide to year-end tax settlement in English, Chinese and Vietnamese.

2		Foreign Employees’ Year-end Tax Settlement Trends

□  The number of foreign employees who have settled year-end taxes increased annually from 2017 to 2019, but dropped by 7.3% year-on-year in 2021 (505,000 persons) compared to the year before due to the COVID-19 pandemic*.

*  The number of foreigners residing in Korea was reduced by 3.8% YoY (2,036,000 → 1,957,000) [Ministry of Justice statistics]

○  However, the amount of year-end taxes reported by foreign employees stood at 1 trillion and 80.2 billion won, increasing 12.2% from the amount filed for income attributable to 2020 (962 billion won).

| Annual year-end tax settlement by foreign employees |

□  Among foreign employees who filed year-end tax settlement for income attributable to 2021, 37.5% were Chinese nationals (189,000), accounting for the most among foreign employees.

○  Compared to the year before, the number of this year’s foreign employees who filed year-end tax settlement mostly decreased, except for U.S. nationals (3.5% increase).

| Number of foreign employees who settled year-end taxes by nationality |

□  By nationality, U.S. nationals recorded the highest amount of year-end taxes filed for 2021 income (415.8 billion won), followed by China, Japan, Canada and Australia.

○  In all the top five countries, the amount of year-end taxes filed increased from the year before. In the case of the U.S., the increase rate was 14.4% YoY.

| Amount of year-end taxes filed by foreign employees |

□  When we look at the top 10% income bracket among foreigners who filed year-end taxes last year, Chinese employees (15,000 persons, 30%) accounted for the most. In terms of the amount of taxes filed, the portion of U.S. employees was the highest (410.8 billion won, 47%).

| Breakdown of top 10% income bracket by nationality |

Number of persons who filed year-end taxes	Amount of taxes filed

3		Foreigners’ Year-end Tax Settlement: What to Know

Resident vs. Non-resident

□  Where a foreign employee is a resident, the same general deduction items such as income deduction and tax credit that apply to domestic residents shall apply. However, income deduction for savings for housing purchase* which applies only to household heads cannot be applied.

* Deduction for housing funds (Articles 52 (4) and (5) of the Income Tax Act), tax credit for monthly rent (Article 95-2 of the Restriction of Special Taxation Act) are applicable.

	The deduction items differ depending on whether the employee is a resident or not
□ Where a foreign employee is a non-resident, most deduction items excluding certain income deduction and tax credit items* do not apply. * Wage and salary income deduction, personal deduction, pension insurance premium deduction, deduction for contribution to employee shareholder association, tax credit for wage & salary income, tax credit for taxpayer association

Flat tax rate (19%) applied to foreigners

□  Except when employed by a special-related company*, foreign employees can choose to have the flat tax rate (19%) applied for five years** from the taxable year to which the first day of providing labor belongs.

○  However, if choosing to apply the flat tax rate, non-taxation, income deduction, tax reduction/exemption and tax credit shall not apply. For example, non-taxable wages such as national health insurance premium borne by the employer shall be considered taxable income.

* Special related company: The employer has family relations in the case of an individually owned company, and owns 30% or more of the company’s shares in the case of an incorporated company. (Excluding foreign-invested companies subject to tax reduction/exemption)

** Twenty years for income incurred on or after Jan. 1, 2023(Article 18-2 of the Restriction of Special Taxation Act)

	Example of wrongfully applied flat tax rate for foreigners
□ Where the foreign representative AA of limited company A owns 100% of the company’s shares but a flat tax rate was applied. →The flat tax rate shall be rejected and the basic tax rate shall apply

Application for tax reduction/exemption for foreign engineers

□  A foreign engineer who provides technology through an engineering technology contract or meets the requirement as a researcher is entitled to a 50% reduction of income tax for wage & salary income incurred for five years (two years for persons who first provided service no later than Dec. 31, 2018).

*  Where a foreign engineer working in the field of parts, materials and equipment provides service in Korea on or after Jan. 1, 2020 for the first time, the reduction rate shall be 70% for the first three years and 50% for two years thereafter.

	Be sure to check the conditions for income reduction/exemption for foreign engineers
□ Reduction/exemption of income tax for foreign engineers is granted to ① foreigners providing technology under an engineering technology introduction contract or ② foreigners who obtained a bachelor’s degree or higher in the field of science and engineering and are working for a domestic company-affiliated research center. In this regard, foreign employees should check if they meet the requirements.

Tax exemption for foreign instructors

□  In the case of countries (e.g. U.S., U.K., Australia) that concluded tax treaties with Korea which includes tax exemption clauses for instructor (professors), income tax related to lecture and research shall be exempted for their residents* for a certain period if they meet the requirements for exemption.

*  The conditions are different depending on the tax treaty, so it is important to check the specific conditions that apply.

Check the tax treaty between Korea and the resident’s country

□  Check the national tax law information portal (txsi.hometax.go.kr).

Exemption	Tax treaty counterpart
None	Norway, Switzerland, Singapore, Canada, Hong Kong, etc. (16 countries)
Exemption for 2 yrs	U.S., Vietnam, Spain, Japan, France, Australia, etc. (71 countries)
Exemption for 3 yrs	Georgia, China, etc. (4 countries)

4		Various Information Services for Foreign Taxpayers

Services specifically for foreign employees

□  The NTS operates a hotline for foreigners (☎ 1588-0560) in English to help foreign employees in Korea settle their year-end taxes.

○  To ensure that foreign employees who are not fluent in Korean can conveniently settle year-end taxes, the NTS provides the Easy Guide to Year-end Tax Settlement in English and foreign-language year-end tax settlement manual (in English, China and Vietnamese) in its English website.

□  In particular, this year, the NTS provides a short-form video guide to settling year-end taxes with English, Chinese and Vietnamese subtitles on the NTS youtube channel and NTS English website so that taxpayers can easily check the necessary information.

| About the Short-Form Video Guide |

Details	Screenshot
▶ Content: Information on filing year-end taxes that may be difficult or complicated for taxpayers are explained through a short-form video. * Short-form: Short video content ▶ Subtitles: Considering the nationality* of foreigners who settle year-end taxes the most, videos with English, Chinese and Vietnamese subtitles are posted additionally. * Among the foreigners who settled year-end taxes for income attributable to 2021 (505,000 persons), Chinese and Vietnamese nationals accounted for 46% (230,000 persons)

Convenient mobile access

□  Foreign employees who need to settle their year-end taxes can access the related foreign-language guidebooks and manuals conveniently through mobile phone.

| English Mobile Webpage |

Home Page	Year-end Tax Settlement	Forms, etc.

□  The NTS will continue to further improve the year-end tax settlement filing and support system for foreign employees.

< How to Use the Services for Foreigners >

Service		Access
	Phone (English)	1588-0560, 9:00 to 18:00 (excluding 11:30 to 13:00)
	Online Q&A	www.nts.go.kr/english/main.do > Help Desk > Q&A
	Easy Guide for Foreigners’ Year-end Tax Settlement	www.nts.go.kr/english/main.do > Resources > Publication > 2021 Easy Guide for Foreigners' Year-end Tax Settlement
	Year-end tax settlement manual (English, Chinese, Vietnamese)	www.nts.go.kr/english/main.do > Resources > Publication > 2021 Year-end Tax Settlement Manual for Foreigners
	Short-form video guide (English, Chinese, Vietnamese)	www.youtube.com/user/ntskorea

【Attachments】

1. FAQ on foreigners’ year-end tax settlement

2. Criteria for determining resident and non-resident

3.  Income deduction and tax credit for foreign residents and non-residents

4. How to calculate tax for year-end tax settlement

5. Documents of proof for income deduction and tax credit

1		FAQ on foreigners’ year-end tax settlement

1		I am a foreigner and I earn wage & salary income in Korea. It is my knowledge that my company pays taxes on behalf of myself every month. Then why is year-end tax settlement necessary?

○  Year-end tax settlement is a process of finalizing the income tax amount that the withholding agent (employer) should pay for employees’ wage & salary income for the relevant taxable period.

-  The final amount of tax payable is determined by reflecting the report on income deduction and tax credit claims submitted by the employee to his/her wage & salary income for the relevant taxable year.

○  When the finalized amount of tax payable is determined through year-end tax settlement, the withholding agent (employer) compares the amount to the sum of taxes withheld every month. If the total withheld amount is more than the tax payable, the surplus amount is refunded (added to wage). In the other case, the amount in short is additionally collected (deducted from wage).

* Related laws: Articles 134 and 137 of the Income Tax Act

2		If I leave the company in the middle of the year, how do I settle year-end taxes?

○ If an employee leaves the company in the middle of the year, the withholding agent (employer) settles year-end taxes when the wage & salary income of the retiring month is paid.

○  Therefore, an employee retiring in the middle of the year shall submit his/her report for income deduction and tax credit and supporting documents to the company before payment of the wage & salary income for the month in which the employee retires.

* Related law: Article 137 of the Income Tax Act

3		If a foreigner who is a resident of Korea provides service overseas and is paid from overseas, does he/she have to settle the year-end income by aggregating all incomes from both overseas and domestic sources?

○  A foreigner who is a resident of Korea should, in principle, settle year-end taxes with the sum of all wage & salary income from both Korea and abroad.

-  However, a foreign resident whose total period of having a domicile or residence in Korea for 10 years retroactively from the last day of the relevant taxable period is five years or less, year-end taxes shall be settled only for the overseas wage & salary income remitted to Korea or paid in Korea.

* Related laws: Articles 3 and 20 of the Income Tax Act

4		If the flat tax rate (19%) is applied, is the national health insurance premium and employment insurance premium borne by the employer included in the tax base?

○  For a foreign employee who chooses the flat tax rate, regulations on non-taxation, tax reduction/exemption, and income deduction and tax credit do not apply. In this regard, national health insurance premium and employment insurance premium borne by the employer pursuant to the Income Tax Act are included in the tax base.

*  Related laws: Article 18-2 of the Restriction of Special Taxation Act,
Article 12 (3) of the Income Tax Act

5		How is the five year taxable period for which the 19% flat tax rate is applied to foreign employees calculated?

○  The period for which the 19% flat tax rate applies to foreign employees is from the first day of providing labor in Korea to the taxable year in which five years elapse from such date ends.

-  For example, if a foreign employee started providing labor in Korea for the first time on Apr. 10, 2018, he/she can choose to report tax by applying a 19% flat tax rate for wage & salary income paid for five taxable years from 2018 - the taxable year to which the date of first providing labor belongs - until Dec. 31, 2022.

*  Related law: Article 18-2 of the Restriction of Special Taxation Act

6		Is it always an advantage to apply the flat tax rate (19%)?

○  The regulations on flat tax rate are special regulations that apply exclusively to foreign employees who faithfully pay taxes. Therefore, the amount of tax payable may differ depending on each eligible taxpayer‘s tax base and deduction items, so it depends on a case-by-case basis.

-  Therefore, it is reasonable for a foreign employee to calculate the expected amount of tax payable using the simplified year-end tax settlement service and choose a method that is more advantageous.

7		According to the revised tax laws for 2023, the applicable period for flat tax rate shall be extended from 5 years to 20 years. When does this start to apply?

○  The extended period for flat tax rate application shall be applied to income incurred on or after Jan. 1, 2023, so it does not apply to income attributable to 2022.

8		Are the medical expenses spent in an overseas medical institution deductible?

○ The medical expenses spent in an overseas medical institution are not deductible.

* Related laws: Article 59-4 (2) of the Income Tax Act, Article 118-5 (1) of the Enforcement Decree of the Act

9		Are overseas credit card spendings deductible?

○  The amount of credit card spendings overseas is not deductible.

* Related law: Article 126-2 (1) of the Restriction of Special Taxation Act

10		Are the education expenses for a foreign employee’s children attending an overseas school deductible?

○  The education expenses that a foreign resident spent for his/her children attending an overseas educational institution are not deductible.

-  However, the education expenses that a foreign resident spent for his/her children attending a foreign school established in Korea by obtaining approval pursuant to the Elementary and Secondary Education Act are deductible.

* Related laws: Article 59-4 (3) of the Income Tax Act, Articles 118-6 (4) and (5) of the Enforcement Decree of the Act

11		What are the general qualifications of tax exemption for a foreign English teacher?

○  The regulations on tax exemption for foreign English teachers of each country can be looked up on the national tax information system (txsi.hometax.go.kr).

○  The conditions for tax exemption differ depending on the tax treaty counterpart country, so it is needed to review the relevant tax treaty.

○  For example, a U.S. resident who satisfies the following conditions is eligible for tax exemption.

-  Inviting organization: Central or local government or certified education institute

* Not applicable for private language schools or English camps within English villages.

-  Invitation period: Should not exceed two years

* Related treaty: Article 20 (1) of the Korea-U.S. Tax Treaty

-  Purpose of invitation: Lecture or research at a university or certified education institution

-  Purpose of visit: Should be primarily for such lecture or research

2		Criteria for determining resident and non-resident

□  A ‘Resident’ means an individual who has had his/her domicile in Korea or has had a place of residence for 183 days or more in Korea while ‘Non–Resident’ means an individual who is not a resident (Article 1-2 of the Income Tax Act).

○  The definitions of ‘domicile’ and ‘place of residence’, which determine resident status, are as follows:

(Domicile) Determined by objective living status such as family members supported by the resident and assets held in Korea

(Place of residence) The place where an individual resides for a lengthy period of time besides the domicile without forming strong residential ties

□  Criteria for determining resident/non-resident

1. Determination by the place of residence (if an individual satisfies the requirements on length of stay: Resident)	2. Determination by the domicile (if an individual has a domicile regardless of the period of stay: Resident)
○ An individual who has had a place of residence in Korea for 183 days or more - If the length of having the place of residence is 183 days or more* during one taxable period * Consecutive residence not required - The period of having the place of residence shall be from the day after the date of arrival in Korea to the date of departure. Temporary departure is included in the period of residence in Korea.	○ An individual is considered as having a domicile in Korea in the following cases: - When an individual who has resides in Korea has an occupation that requires him/her to reside in Korea for 183 days or more - When an individual who resides in Korea has family members in Korea supported by him/her and is likely to reside in Korea for 183 days or more based on the job and the status of the assets. - In case of a crew member of a ship or an air plane traveling abroad, when the place of residence of family members supported by him /her or the place of stay during the period other than the working period is in Korea, the domicile of him/her is considered to be in Korea.
3. An executive or an employee dispatched by an overseas place of business of a resident individual or domestic company or by a foreign company (limited to where a domestic company directly or indirectly invested 100/100 of the total number of stocks issued or the contributed shares), or a public officer working abroad is considered a resident.

○  Even if the individual does not fall under any of the above, It is possible to determine his/her domicile based on objective living status such as family members in Korea supported by him/her and assets held in Korea.

* Only the living status in Korea is considered. The living status in Korea and overseas is not compared.

3		Income deduction and tax credit for foreign residents and non-residents

Type			Domestic		Foreign		Related law/Note
			Resident	Non-resident	Resident	Non-resident
Total wage & salary income			Including foreign- source income	Domestic- source income	Including foreign- source income	Domestic- source income	Article 3, Income Tax Act
Deductions for wage & salary income			◯	◯	◯	◯
Personal deduc- tions	Basic deductions (Yourself, spouse, dependent family)		◯	Only yourself	◯	Only yourself	Article 122, Income Tax Act
	Additional deductions (Senior citizens, the disabled, woman, etc.)		◯	Only yourself	◯	Only yourself	Article 122, Income Tax Act
Deductions for pension insurance premium
			◯	◯	◯	◯	National pension insurance borne by yourself
Special income deductions		National health insurance & employment insurance premium	◯	X	◯	X
		Housing fund	◯	X	◯	X
Other income deduction		Pension savings, etc.	◯	X	◯	X
		Deposits in a mutual aid fund for small enterprises and small entrepreneurs	◯	X	◯	X
		Savings account for housing purchase	◯	X	X	X
		Contributions to a small and medium business start-up investment fund	◯	X	◯	X
		Credit card spending	◯	X	◯	X
		Employees of SMEs that maintain savings	◯	X	◯	X
		Long-term collective investment securities savings	◯	X	◯	X
		Contributions to Employee Stock Ownership Association	◯	◯	◯	◯	Applicable to all association members
Tax credits, etc.		Wage and salary income	◯	◯	◯	◯
		Child tax credit	◯	X	◯	X
		Special tax credit(insurance premium, medical expenses, education, expenses, donations)	◯	X	◯	X
		Monthly rent	◯	X	◯	X
		Taxpayer association	◯	◯	◯	◯	Applicable if you joined an association and taxes were withheld
		Foreign tax credit	◯	X	◯	X
		Standard tax credit	◯	X	◯	X

4		How to calculate tax for year-end tax settlement

1. General year-end tax settlement process

Step 1

Gross wage/salary income

Annual wage & salary income

(-) non taxable income

= Gross wage and salary income

○ Non-taxable income

- Subsidies for self-driving (200,000 won/month)

- Non-taxable tuition expenses, employment scholarships

- Foreign source income (1 million won [3 million won]/ month)

- Child care allowance for children aged 6 or under

(100,000 won/month), etc.

Step 2

Adjusted wage/salary

income

Gross wage & salary income

(-) wage & salary income deduction

= Adjusted wage & salary income

○ Deductions for wage & salary income

Total wage & salary amount (won)	Wage & salary income deduction (up to 20 million won)
5 million or less	Gross wage & salary × 70%
More than 5 million to 15 million or less	3.5 mil.＋(amount exceeding 5 mil. × 40%)
More than 15 million to 45 million or less	7.5 mil.＋(amount exceeding 15 mil. × 15%)
More than 45 million to 100 million or less	12 mil.＋(amount exceeding 45 mil. × 5%)
More than 100 million	14.75 mil.＋(amount exceeding 100 mil. × 2%)

Step 3

Tax base

Adjusted wage & salary income

(-) Other deductions

ㆍPersonal deduction

ㆍ  Pension insurance premium deduction

ㆍSpecial income deduction

ㆍOther deductions

(+)  Amount exceeding the composite ceiling of income deduction

= Tax base

○ Personal deductions

-  Basic deduction, additional deduction

○ Deduction for pension insurance premium

-  Premium allotment paid by the taxpayer for National Pension, Public Officials Pension, etc.

○ Special income deduction and other deductions

Special income deduction	Other income deductions
① Insurance premium ② Housing funds	①Individual pension savings
	②Contributions to SME start-up investment associations, etc.
	③Credit card usage
	④Deduction for small businesses and small entrepreneurs
	⑤Deposits in a mutual aid fund for small enterprises and small enterprises
	⑥Wage cut amount by small and medium enterprises which have maintained the same level of employer
	⑦Long-term collective investment securities savings

○ Ceiling on composite income deduction amount

-  Amount exceeding the composite ceiling of income deduction

-  If the deduction amount included in the composite ceiling (e.g. special income deduction, etc.) exceeds 25 million won, the exceeding amount will be added to the tax base.

Step 4

Calculated tax amount

Tax base

(×) tax rate

=  Calculated tax amount

Tax base bracket (won)	Tax rate	Calculated tax (won)
12 mil. or less	6%	Tax base × 6%
More than 12 mil. to 46 mil. or less	15%	720,000 + (amount exceeding 12 mil. × 15%)
More than 46 mil. to 88 mil. or less	24%	5.82 mil. + (amount exceeding 46 mil. × 24%)
More than 88 mil. to 150 mil. or less	35%	15.9 mil. + (amount exceeding 88 mil. × 35%)
More than 150 mil. to 300 mil. or less	38%	37.6 mil. + (amount exceeding 150 mil. × 38%)
More than 300 mil. to 500 mil. or less	40%	94.6 mil. + (amount exceeding 300 mil. × 40%)
Over 500 mil. to 1 bil. or less	42%	174.6 mil. + (amount exceeding 500 mil. × 42%)
Over 1 bil.	45%	384.6 mil. + (amount over 1 bil. x 45%)

Step 5

Determined tax amount

Calculated tax amount

(-) Tax credit

=  Determined tax amount

○ Tax credit

- Tax credit for wage & salary income, child tax credit, pension account tax credit, special tax credit, taxpayer association tax credit, etc.

Step 6

Tax payable

(refundable)

Determined tax amount

(-) Prepaid tax

=  Tax payable (refundable)

○ Prepaid tax

- Monthly amount withheld from wage & salary income according to the simplified tax withholding table or at a 19% flat tax rate

2. Year-end tax settlement when applying a 19% flat tax rate

Step 1 Annual wage & salary income	Including non-taxable income	○ Non-taxable income - Subsidies for self-driving (200,000 won/month) - Work-related education expenses - Employee contributions to National Health Insurance and Employment Insurance - Child care allowance for children aged 6 or under (100,000 won/month), etc.
Step 2 Determined tax amount (=Calculated tax amount)	Annual wage & salary income (×) 19% = Determined tax amount
Step 3 Tax payable (refundable)	Determined tax amount (-) Pre-paid tax = Tax payable (refundable)	○ Pre-paid tax - Monthly amount withheld from wage & salary income according to the simplified tax withholding table or at a 19% flat tax rate

Basic tax rate vs 19% Flat tax rate

< Information > ∙ Henry worked for ABC Company in 2021 and earned income as follows: - Annual wage & salary income: 200,000,000 won (including non-taxable income of 5,000,000 won) ∙ Family members: Henry (aged 36), Jin (spouse, aged 38) * Jin is a dependent family member subject to basic deduction and her annual wage & salary income is not more than 1,000,000 won. ∙ Expenditure details - National pension contribution: 2,500,000 won - National health insurance premium: 1,500,000 won ∙ Pre-paid tax amount: 44,334,000 won
When applying basic tax rate		When applying 19% flat tax rate
Annual wage & salary income Non-taxable wage & salary income	₩200,000,000 5,000,000	Annual wage & salary income	₩200,000,000
Gross wage & salary income Deduction for wage & salary income	₩195,000,000 16,650,000
Adjusted wage & salary income	₩ 178,350,000
Personal deduction - Basic deduction	3,000,000
Pension contribution deduction	2,500,000
Special income deduction – National health insurance premium	1,500,000
Tax base	₩ 171,350,000
Calculated income tax (basic tax rate: 38%) Tax credit for wage & salary income	₩ 45,713,000 500,000
Determined tax Prepaid tax	₩ 45,213,000 (-) 44,334,000	Determined tax Prepaid tax	₩ 38,000,000 (-) 44,334,000
Tax due	₩ 879,000	Tax due	₩ - 6,334,000

5		Documents of proof for income deduction and tax credit

Document	Who should submit	Issued by
Certification of foreigner registration	Foreign employees hired in 2021 Foreign employees whose dependent families were changed	Immigration office
Receipt for payment of insurance premium	Subscribers of life insurance, etc.	Insurance company
Certification of payment of medical expenses	Employees subject to medical expense deduction	Hospital, pharmacy
Certificate of payment of education expenses	Persons who are students or whose dependent family members are students	Education institute
Receipt for donations	Employees who provided donations	The place of donation
Confirmation of credit card spendings, etc.	Employees subject to deduction for credit card spendings	Credit card company
Application for flat tax rate for foreign employees	Foreign employees who wish to have the flat tax rate (19%) applied	Taxpayer
Application for tax reduction/exemption for foreign engineers	Foreigners satisfying the tax reduction/exemption qualifications pursuant to the relevant laws	Taxpayer
Application for tax reduction/exemption for wage & salary income	Foreign employees dispatched to Korea who satisfy the conditions for tax reduction/exemption prescribed by government treaties	Taxpayer
Application for tax credit for taxes paid overseas	Persons who worked overseas and paid income tax overseas	Taxpayer