Taxes in Korea include national and local taxes. For every purchase, purchase-related taxes(VAT or acquisition tax) are added . Other applicable taxes will be billed periodically and the payments must be made.
- Income tax
- A resident who has stayed in Korea for a year or less than a year is taxed for the income for the duration of their stay. Over a year, every applicable income taxes will be added for those whose stay is over a year.
- Corporate tax
- Corporate tax is discriminatorily imposed depending on the profit of the corporation. For a profit of 100 million won, maximum 16% of tax is imposed while imposing 28% for a profit of more than 100 million won.
- Value Added Tax(VAT)
- End-purchaser is taxed 10% tax on the products and services provided.
- Inheritance tax
- It is a type of tax imposed to the inherited property and those who are obliged to pay inheritance tax must report and pay the tax within 6 months from the last day of the month that covers the commencement date of inheritance.
- Charity tax
- Charity tax is taxed on the donations made during the past 12 months. (billed on August 1st of every year and the payments must be made from August 16th to 31st.)
- Special exercise tax
- Special exercise tax is imposed for the high-priced luxury items.
- Education tax
- Education tax is imposed for the improvement in service and quality of education.
- Transporation tax
- The transportation tax helps finance the expansion of roads and intercity railroads.
- Special tax for local development
This special tax is designed for the capital used for regional development, the improvement of water quality and the conservation of water resources.
- Acquisition tax
- Acquisition Tax is charged when people purchase real estate (land, buildings), vehicles, heavy machinery, timber, airplanes, and memberships for golf clubs or condominiums.
- Registration tax
- The registration tax is imposed as a transfer tax with the acquisition of real estate or vehicles.
- Property tax
- The property tax is imposed on the possession or transfer of property (Billed on June 1st every year and paid June 16-30).
- Accumulative land tax
- The accumulative land tax is the special tax designed to prevent the over-possion of lands and it is taxed on the profits incurred due to the hikes in the land price. (Billed on June 1st of every month, and paid October 16-31).
- Resident tax
- The resident tax is imposed for the purpose of enhancing the quality of residential environment and promoting welfare which would ultimately improve the quality of life.
- Automobile tax
- The automobile tax is charged to the registered automobile owners for the damage to the pavements and environmental pollution, and it also has the characteristics of the property tax.
- Permit tax
- The permit tax is imposed on various types of permits. (Billed on June 1st of every month, and paid October 16-31).All real estate contracts must be reported with the exception of permitted areas.
All purchases of products and subjects are subject to 10% national Value Added Tax(VAT). All stores and restaurants automatically include the VAT in the marked price. In case of big hotels, in general and the restaurants within the hotels, do not include the VAT in the marked price but add it to the final bill. Employers must assist foreign employees with income tax and tax return, while most residents of foreign nationality do not need to concern themselves with being taxed on the un owned properties.
Any taxes they are required to pay will be sent to them with a gero style bill. Residents wanting further information on the tax contact the International Tax Division of the Ministry of Finance and Economy. (TEL: 02-503-9228, Fax: 02-503-9229)
Vehicle taxes are assessed semi-anually(June and December) and are based on the size of the automobile’s engine. The owner of the vehicle is responsible for a number of taxes. When purchased, the owner must pay registration, acquisition, and education taxes. A license tax (according to license type) must be paid once a year. Automobile taxes (according to engine size) must be paid twice each year (June and December). An education tax (30% of the automobile tax) is included with the tax and must be paid at the same ti
Real estate tax
When buying or selling real estate property, the buyer and seller are subject to various related taxes based on the selling price. The buyer pays an Acquisition Tax (2%), Registration Tax (3%), and Education Tax (20% of Registration Tax). The seller must pay a Transfer Income Tax (20-60% of any gains from the previous purchase price, with the amount depending on the amount of time the buyer owned the property. When renting housing, the owner is responsible for all property-related taxes. Give any tax bills that come to the owner or the real estate agent acting as a go-between.
Note: The government can modify the amount of taxes imposed to increase or decrease housing turnover, depending on current economic conditions.
Customs / Import duties
Items brought into Korea can be subject to import duties or customs fees. Each person can bring a certain amount of items into Korea duty free. Persons bringing in more than the allowed number of items must pay import duties or dispose of the items. Items worth over $400 purchased outside Korea are also subject to import duties. (The $400 amount applies to the total value of all goods purchased abroad.)
Unaccompanied baggage, including items mailed to residents, can also be subject to import duties. Shipping fees are included when computing the value of a shipped item. Persons with unaccompanied baggage should fill out a second customs declaration form (describing the unaccompanied contents). The second customs declaration must be given to the Customs house when clearing the unaccompanied baggage.
- Items to be Re-exported
- Non-residents bringing dutiable items into Korea but plan to take them out with them when they leave can be exempt from duties. The item(s) must be declared and a note will be placed in the owner's passport. The owner will have to pay the duty if the item is not in his or her possession when leaving the country
- Exemption for Goods Being Returned to Korea
- If you leave with expensive items purchased in Korea and you plan to bring it back, declare the items on departure to avoid paying a duty when bringing them back into Korea.
- For additional information, please contact the Passenger and Simplified Clearance Division at (042) 472-2183 (web site: http://www.customs.go.kr).
- the person in charge
- Taxation Management Division Tel.02-3423-5603
- Taxation Division 1 Tel.02-3423-5642