2010 - Easy - Guide For Foreigner's Year-End Tax Settlement

Easy Guide for Foreigners' Year-end Tax Settlement
2010. 12
National Tax Service
P R E F AC E
To our taxpayers, With a growing number of influx of foreign workers, Korea is transforming into a multi-cultural nation. This year over 360 thousands of foreign workers are expected to conduct year-end settlement. The National Tax Service of Korea would like to express our gratitude to your contribution to the development of the Korean economy and tax compliance. The wage and salary income tax attributable to the year 2010 is finalized through the Year-end Tax Settlement in February, 2011. Specially, this year there are important changes in non-taxation and tax exemption treatment for foreign workers that require careful attention of foreign tax payers. The NTS has been publishing this booklet to help foreigners who want to finalize their tax obligation through the Year-end Tax Settlement. It contains relevant tax laws, guides for foreign taxpayers, as well as major legislative changes of the tax law. To help understand the guide more easily, the NTS supplemented the contents with such tips as summaries and examples. In addition, some guides of how to calculate and to fill in related forms are added for foreign teachers and engineers who are liable to special tax treatments. In addition to this book, the NTS has implemented various customized services such as Help-line for Foreign Taxpayers (1588-0560), Foreign Taxpayer Service Desk installed in 57 district tax offices, Q&A section by E-mail at our English web-site and Interpretation Service available for foreigners. We sincerely hope all these measures will be a useful guidance to help you better understand the Korean tax law and to provide answers to your questions. Thank you. Yun Jun Park Assistant Commissioner for International Taxation National Tax Service
Flowchart of Year-end Tax Settlement of Wage & Salary Income Tax

Total Income from Employments
Refers to all forms of compensation received in exchange for provision of employment (not including compensation for employment received on a daily basis)
( - ) Non-taxable Income Compensation of Actual Expenses compensation for driving one's own car, research subsidies for qualified teachers, reporting allowances for reporters: limit is 200,000 per month Salary derived from overseas: limit is 1,000,000(1,500,000) per month Allowance for Night Duty received by manufacturing employees: limit is 2,400,000 per annum Meal costs up to 100,000 per month Allowance for childbirth or childcare of children at the age of 6 years or younger: up to 100,000 per month, etc. Gross Wage & Salary Income ( - ) D eduction for W age & Salary Income up to 5,000,000 : 80% of the Total amount over 5,000,000~ up to 15,000,000 : 4,000,000 + 50% of over over 15,000,000~ up to 30,000,000 : 9,000,000 + 15% of over over 30,000,000~ up to 45,000,000 : 11,250,000 + 10% of over over 45,000,000~ : 12,750,000 + 5% of over Adjusted Wage & Salary Income ( - ) Personal Deduction Basic Deduction: 1,500,000 per capita Taxpayer himself, Spouse and dependents with annual income of less than 1,000,000 Additional Deduction The Handicapped, New BornNew Adopted : 2,000,000 per capita The Aged(70 years old or more), Child under 6 years old : 1,000,000 per capita Qualified Female Taxpayer : 500,000 Additional Deduction for Households with Multiple Children With two eligible children 500,000 plus 1,000,000 per child after the first two children ( - ) Pension Contribution Deduction ( - ) Special Deduction Insurance Premium National Health Insurance, Employment Insurance, Long-term Senior Nursing Insurance Premium : Total amount, Qualified Insurance(ex. automobile insurance) : Limit is 1,000,000 Insurance for the handicapped : Limit is 1,000,000 Medical Expenses : Up to 7,000,000 Taxpayer himself, The Aged(65 years old or more) and The handicapped: No limit Deductible Amount : Medical Expenses - (Gross Wage & Salary Income 3%) Education Expenses Taxpayer himself : No limit Kindergarten, Elementary, Secondary, High school : limit is 3,000,000 per capita University or College : limit is 9,000,000 per capita 5,000,000 15,000,000 30,000,000 45,000,000
Qualified Donation
Category Political Fund donation, Statutory donation Special Donation of 50% Contribution to Employee Stock Ownership Association Donation to religious groups Specified donation Deduction Ceiling Amount of Adjusted Wage & Salary Income (Adjusted Wage & Salary Income-)50% (Adjusted Wage & Salary Income--)30% (Adjusted Wage & Salary Income---)10% (Adjusted Wage & Salary Income---)20% 5 Years 5 Years Carry-over 1 Year 2 Years
Standard Deduction: 1,000,000 If the total amount of Special Deduction is less than 1,000,000 ( - ) Other Deduction Personal Pension Savings: 40% of deposit amount (limit is 720,000) Pension Savings: Total deposit amount Limit is 3,000,000 per annum including retirement pension deduction Deduction for contribution of Small-sized company and Self-employed Mutual aid association The lesser amount between contribution amount and 3,000,000 Investment Association Deduction Investment during 2007 ~ 2008: 10% of investment amount(limit is 50% of Income) Investment during 2009 ~ 2010: 10% of investment amount(limit is 30% of Income) Credit Card Usage Deduction Usage Amount = Credit Card + Debit Card + Tuition through Giro + Prepaid Card + Cash Receipt Deductible Amount = [-(Gross Wage & Salary Income25%)] 20%(25%) Deduction Limit = the lesser of (20% of Gross Wage & Salary Income) or 3,000,000 Employee Stock Ownership Association Contribution Deduction The lesser amount between contribution amount and 4,000,000 Long-term stock-invested savings deduction 1st year20% of payment, 2nd year10% of payment, 3rd year5% of payment Employees of small-to-mid sized companies that have maintained the size of employment : 50% of the reduced amount in wage payment (up to 10M per year) Tax Base (Taxable Income) ( ) Tax Rate (6 35%) up to 12,000,000 : 6% over 12,000,000~ up to 46,000,000 : 720,000+15% of the amount over 12M Won over 46,000,000~ up to 88,000,000 : 5,820,000+24% of the amount over 46M Won over 88,000,000 : 15,900,000+35% of the amount over 88M Won
Calculated Income Tax ( - ) Tax Credit and Exemption Tax Credit for Wage & Salary Income: limit is 500,000 Up to 500,000: 55% of calculated income tax Over 500,000: 275,000 + 30% of over 500,000 Taxpayer Association Credit(TAC): 10% of income tax withheld by Taxpayer Association Foreign Tax Credit: Foreign income tax amount paid or payable in a foreign country Credit Amount = Calculated income tax (foreign source income / gross income) Final Tax Liability ( - ) Pre-paid Tax Payable/Refundable Tax
Summary of Changes to Tax Laws for 2010 Year-end Tax Settlement
Changes
2009
Up to 12 million KRW : 6% Up to 46 million KRW : 16% Up to 88 million KRW : 25% Over 88 million KRW : 35%
2010
Up to 12 million KRW : 6%(no changes) Up to 46 million KRW : 15% (1%p ) Up to 88 million KRW : 24% (1%p ) Over 88 million KRW : 35% (no changes) Donations made in excess of the maximum deductible amount are carried over Statutory donation : 1 yr Special donationa : 2 yrs. Specified donation : 5yrs Excess of 25% of total wage Min[300M KRW, 20% of total wage] Credit card & cash receipts : 20% Debit and check cards : 25% Non-deductible for medical expenses
Tax rate
Carry-over deduction for <NEW> donated amount
Threshold Excess of 20% of total wage Credit card deduction Ceiling Min [5M KRW, 20% of total wage]
Deductible Flat rate of 20% rate Aesthetic/Cosmetic surgery and health Deductible for medical expenses supplement medication Long-term stockinvested savings deduction
Deposit amount(up to 3million KRW) A Resident who subscribed to long-term 1st year 20% of payment stock-invested fund for more than 3 years 2nd year 10% of payment on or before Dec. 31, 2009 3rd year 5% of payment
Election between non-taxation for 30% of total wages and salaries; or taxation of total wages and Non-taxation benefits salaries at a flat rate of 15% for foreign employees (Applicable to taxpayers with a permanent residency in a foreign country)
Flat 15% taxation on total wages and salaries (Not applicable to persons holding Korean citizenship as of the final day of the relevant tax year)
Income tax reduction for foreign technical engineers
Eligibility <New>
Foreign technical engineers who are non-Korean citizens and provide advanced technology through an advanced technology project
50% exemption from income tax for 2 100% exemption from income tax years (Foreign employers who have come Deductibility for 5 years to Korea on or before Dec. 31 2009 will be applied previous provision)
Child aged 6 or under as of the Non-taxation on child Child aged 6 or under as of the first date month in which the payment is care allowance of the taxable period made
Summary of Deductibility of Residents and non-residents

Deductibility Type Resident
Total wage & salary income Deductions for wage and salary income Basic deductions (Self, spouse, dependent family) Personal deductions Additional deductions (The aged, physically disabled, qualified female taxpayer, etc.) Additional deductions for multiple children Pension contribution deduction Insurance premium Educational expenses Medical expenses Special deductions Housing fund Donations Interest payment of loans for long-term housing mortgage Standard deduction Pension savings Membership fees for Small enterprises/small and micro businessmen association Home purchase savings Other income deductions Investment association Credit card usage Long-term stock-invested savings Workers in S/M enterprises which maintain the same employment level Employee stock ownership association contribution Tax credit for wage & salary income Tax credits, etc. Political funds Taxpayer association credit Foreign tax credit Including foreign-source income X X X
Note Non-resident
Domestic-source income Self only Self only X X X X X X X X X X X X X X X X X When joined and withheld by the association Deductible if joined in the association A foreigner is not deemed a householder A foreigner is not deemed a householder A foreigner is not deemed a householder Deductible, if participant of pension plan
Schedule for the Year-end Tax Settlement attributable to 2010

Schedule Sujects
Catetory
Contents
Note
Beginning of Check January Notice on NTS website information on Press release the Year-end Company/ Easy Guide for Foreigners' Year-end Tax Tax Settlement Employee Settlement Collect evidence for income deduction Jan.1127 Employee Get receipts which are not provided in the Simplified Year-end Tax Settlement web-site Purchase of glasses, uniforms, etc. Simplified Year-end Tax Settlement service enabled (Jan.15) Submit evidences for income deduction Additional documents Donation Statement of donations Medical expenses Statement of medical expenses Credit card usage Application for income deduction for credit card usage The company checks Report of Exemption & Deduction from Wage & Salary Income which employees have submitted and evidences Employees submits additional documents to the company if there are missing documents.
The company announces the schedule and information on the Year-end Tax Settlement.
The website for the Simplified Year-end Tax Settlement service is busy on the first day. Visit the site 2 or 3 days later.
Jan.25Feb. Submit 5 Report of Exemption & Deduction Employee from Wage & Salary Company Income Review documents and make correction Receive Receipt for Wage & Salary Income Tax Withholindg Jan.25Feb. 20 Company Employee
Wage & Salary Income earners subject to income deduction for donation and credit card usage submit evidence.
The company notifies any missing evidence to employees.
End of The company calculates the tax payable for the Feb. Year-end Tax Settlement Company Employees check contents of Receipt for Wage & Salary Income Tax Withholindg. Employee Mar.10
Employees make corrections in the Receipt for Wage & Salary Income Tax Withholindg if errors are found. Statement of Donations : for Wage & Salary Income earners who are entitled to Donations Deduction Statement of medical expenses : for Wage & Salary Income earners whose medical expenses amount is 2 million won or more The company gives refunds to employees. Refunds for the Year-end Tax Settlement is not made from the tax office directly.
Submit Statement on Wage & Salary Payment
Company NTS
The company submits Statement on Wage & Salary Payment to the NTS by March 10. Transfer Statement of Donations and Statement of medical expenses electronically
Get refunds
End of The company selects a refund method, either Mar. adjustment refund or refund application. (Tax office) If the company chooses the refund application method, it should also submit an application form for refund by March 10 when it submits Company Report on Fulfillment of Withholding for Februrary. Employee
The schedule for the Year-end Tax Settlement may by adjusted subject to the company's business schedule.
Simplified Year-end Tax Settlement(www.yesone.go.kr)
Simplified Year-end Tax Settlement (www.yesone.go.kr) is a one-stop channel for collecting the receipts you need for claiming your income deduction. Simplified Year-end Tax Settlement is an internet-based service that shows the allowable amount of deduction that you can take for yourself and your dependents. A print-out of the screen displaying such records is used as a valid supporting document that you can submit to your withholding agent. You would need to register your dependents in the website first in order to view their deductibility records (such as their medical and insurance fees). Simplified Year-end Tax Settlement will save you time and trouble of going to each issuer of receipts (such as banks and hospitals) to obtain the necessary documents. You will need to have a Public Internet Certificate to gain an access to data required for claiming income deductions. Public Internet Certificates are issued at banks or district tax offices. How to issue a public internet certificate from the Hometax website 1. Log in Hometax website with an ID and password created at your district tax office (www.hometax.go.kr) 2. Change the given password by the district tax office and confirm 3. Click "Go to issue the Public Internet Certificate" 4. Issue the Public Internet Certificate for Hometax 5. Choose the storage disk where you wish to store the Public Internet Certificate 6. Create a password for Public Internet Certificate (an 8 or more digit long password combined with numbers and English Characters) 7. Click "Confirm"
Simplified Year-end Tax Settlement Web-site
<www.yesone.go.kr>
Simplified Year-end Tax Settlement Web-site
<www.yesone.go.kr>
Simplified Year-end Tax Settlement is available in Korean language only.
Table of Contents
11
Table of Contents
Flowchart of Year-end Tax Settlement of Wage & Salary Income Tax Summary of Changes to Tax Laws for 2010 Year-end Tax Settlement Summary of Deductibility of Residents and Non residents Schedule for the Year-end Tax Settlement attributable to 2010 Simplified Year-end Tax Settlement (www.yesone.go.kr)
. Introduction
15
A. Taxpayer 17
1) Resident 2) Non-resident 3) Difference in Tax Treatment
B. Global and Separate Income Taxation 18 C. Monthly Tax Withholding 18 D. Year-end Tax Settlement 20
1) Employee who has worked for two different companies in 2010 2) Employee who changes its workplace in 2010 3) Year-end Tax Settlement by Taxpayers' Associations 4) In case of not conducting the Year-end Tax Settlement 5) Employee who retires during the year
E. Things To Prepare for the Year-end Tax Settlement 23

1) Proof of documents for Deductions 2) Certificate of the Facts of Alien Registration Summary of evidence and documentation for income deduction
. Year-end Tax Settlement for Wage and Salary Income
25
A. Scope of Wage & Salary Income 27

1) What is Wage & Salary Income 2) Income That Is Not Regarded As Employment Income 3) Non-taxable Wage & Salary Income
12
Table of Contents
B. Deduction for Wage & Salary Income 29 C. Personal Deduction 30

1) Basic Deduction 2) Additional Deduction 3) Additional Deduction for Households with Multiple Children 4) Timing of Determination for Eligibility 5) Maximum Deductibility for Personal Deductions
D. Pension Contribution Deduction 35 E. Special Deduction 35

1) Insurance Premiums 2) Medical Expenses 3) Education Expenses 4) Donations
F. Other Deduction 40
1) Personal Pension Saving Deduction 2) Credit Card Usage Deduction 3) Deduction of Long-term stock-invested savings
G. Calculated Income Tax 44

1) Tax Base (Taxable Income) 2) Tax Rates and Tax Amount
H. Tax Exemption & Tax Credit 44

1) Tax Credit for Wage & Salary Income 2) Taxpayers' Association Credit 3) Foreign Tax Credit 4) Tax Exemption for Foreign Engineers 5) Tax Exemption for Teachers and Professors
I. Taxes Due 48
1) Calculation of Payable / Refundable Tax 2) Special Tax for Rural Development 3) Local Income Tax
Table of Contents
13
. Examples of Income Tax Calculation
51
Case 1. Workers receiving wage & salary income from a single workplace (1) Case 2. Workers receiving wage & salary income from a single workplace (2) Case 3. Workers receiving wage & salary income from two or more workplaces Case 4. Foreign teachers whose entire wage & salary income is eligible for income tax exemption Case 5. Foreign engineers receiving wage & salary income eligible for tax exemption and start to work from 2010
. Examples of Actual Q&A on NTS website

1. Tax Liabilities of Wage & Salary Workers 2. Calculating Taxes on Income from Employment 3. Question on taxes deducted from salary by employer
71
4. Question on tax return of a taxpayer who has income(s) other than earned income 5. Simplified Year-end Tax Settlement 6. Difference in tax treatment between resident and non-resident 8. Other Frequently Asked Questions
. Tax Forms
83
. Appendix
95
1. Major Changes in the Tax Law for 2010 2. Foreign Taxpayer Services 3. Taxpayers' Associations
The explanations and examples in this publication reflect the interpretation by the National Tax Service of Tax Laws. However, the information given does not cover every situation and is not intended to replace the law and change its meaning.

Introduction
. Introduction
17
A.
Taxpayer
Taxpayer, who is liable to pay the income tax on his/her income, is classified into resident and non-resident in terms of whether a country has the taxing right on his/her worldwide income or just domestic source income.
Resident
Principally, a resident is any individual who has his/her domicile in Korea or a place of residence for 1 year or more in Korea. The domicile shall be judged by the objective facts of living relationship, such as the existence of a family living together in Korea and of the property located in Korea. And, the 'place of residence' means the place where a person has dwelt for a long time and his address in which no close general living relationship is formed as the domicile. A taxpayer who falls under the following cases is deemed to have a domicile in Korea.
Who has an occupation which would require him to reside in Korea for 1 year or more; or Who has his family in Korea and is likely to reside in Korea for 1 year or more in view
of his occupation or assets held in Korea. On the other hand, according to the general provision 1-4 of Income Tax Law, if he/she has his/her general living relationship including his/her family and property at home, he/she shall be regarded as a resident of Korea, even a person has a job overseas and stayed there for more than 1 year. A resident is subject to income tax on all incomes derived from sources both within and outside the country. For a foreign resident whose combined period of domicile or residence in Korea for the ten years immediately preceding the end of the relevant taxable period is five years or less, he/she will be taxed on his/her foreign-source income only if the foreign-source income has been paid in Korea or remitted to Korea.
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2 Non-resident
A person who is not a resident of Korea is deemed a non-resident and is subject to income tax only on income derived from sources within Korea.
3 Difference in Tax Treatment

When a non-resident who does not have a domestic place of business has earned income from employment in Korea, most of the provisions concerning the tax base and tax amount of residents shall apply to him/her. However, in calculating tax base and tax amount, a non-resident is not entitled to basic deduction(except for him/herself), additional deduction (except for him/herself), special deduction and other deductions, etc.
B.
Global and Separate Income Taxation

taxation
Income derived by residents and non-residents is subject to global or separate respectively.
Under global taxation, Real Estate Rental Income, Business Income, Wages & Salary Income, Pension Income, and Other Income are aggregated and taxed progressively. Interest and dividend are also taxed globally with some exceptions. Retirement Income, Capital Gains are items subject to separate taxation and thus taxed separately at varying rates.
Tax withholding is applied to each domestic source item of income of non-residents who do not have a place of business in Korea and do not have income from real estate located in Korea.
C.
Monthly Tax Withholding
Regardless of whether an employee is resident or non-resident, when he/she is paid wage and salary income, his/her personal income tax is monthly withheld by his/her withholding agent(employer, taxpayer association) and deducted from his/her salary every month. That is, an
. Introduction
19
employer paying wage & salary income must deduct income tax monthly from the earnings of their employees based on Simplified Tax Withholding Tableissued by National Tax Service (NTS) and the total of these deductions has to be paid over the NTS (district tax office concerned) by the tenth day of the following month. However, a person who has no more than twenty employees on average from January to December of the preceding year may pay taxes withheld to the government every half-year, after obtaining an approval by the head of the tax office concerned.
In the case of paying independent service income to a non-resident, which is different from Dependent Wage & Salary Income, 20% of the amount payable(paid) is withheld at the time of such payment by the person paying the amount of income from domestic sources to a non-resident who has no domestic place of business, unless otherwise provided in an applicable tax treaty. The withholding agent has to pay it to the government by the 10th of the following month.
TIP
What is the rate of w ithholding tax on w age and salary income? Wage and salary income of daily workers : 8% Wage and salary income of workers other than daily workers - On the day of monthly payment : withheld by the "Simplified Tax Table" - Year-end tax settlement : calculated by the basic tax rate of 6%~35%
How to pay w ithheld income tax The withholding agent shall payment, (2) file a report on (3) pay the amount through month in which such tax is (1) withhold the income tax at the time of wage/salary the status of withholding to the competent tax office, and financial institutions, by the 10th day of the following withheld with a statement of payment.
20
D.
Year-end Tax Settlement
Taxpayer's Wage & Salary income tax liability for the year is settled and finalized in February of the next year through year-end tax exact computation as we call "Year-end Tax Settlement". Then, the total of monthly withholding(the amount withheld) taken off an employee's earnings is treated as a credit against the overall amount of tax payable by the employee for the tax year in question. To sum up, a withholding tax agent, who is liable for tax withholding, must calculate the tax amount for the year at the time of the second payment of wage and salary income of the next year and collect or refund the balance between the tax amount payable calculated by applying the tax rates and the tax amount withheld according to the Simplified Tax Withholding Table. If a taxpayer has wage & salary income only, he/she is not subject to final global income tax return(self-assessment). If he/she has other incomes in addition to wage & salary income, he/she should file final global income tax return in total of the incomes by the end of May of the next year. Once the Year-end Tax Settlement is complete, the withholding agent shall make 3 copies of the receipt for wage & salary income tax withholding and give an each copy of the receipt to the tax office and employee.
1) Employee who has worked for two different companies in 2010

Where a person receives employment income from two or more employers, he/she shall submit a report of workplace change to the withholding agent of the main workplace before he/she receives wage and salary income. Once the withholding agent of the main workplace receives the report of workplace change, the withholding agent should submit the report to the competent tax office and notify it to the withholding agent of the worker's minor workplace. Then, the wage and salary income earner should get a receipt for tax withholding for the wage & salary income from the withholding agent of the minor workplace and submit it to the withholding agent of the major workplace before he/she receives wage & salary income for the following year's February.
. Introduction
21
withholding agent of the major workplace conducts the year-end settlement for the aggregate of wage & salary income from the major and minor workplace. If the person receives employment income from two or more employers does not submit a report of workplace change or does not submit a Receipt for Wage & Salary Income Tax Withholding from the minor workplace to the major workplace, each withholding agent should conduct the Year-end Tax Settlement separately only for the income it pays.
2 Employee who changes its workplace in 2010

In case where an employee who has retired halfway in the current year is newly employed at another work place, the withholding agent of such new work place shall have the relevant employee submit the receipts for tax withholding for the wage & salary incomes at the former work place, and a copy of the book for tax withholding for wage & salary incomes, and conduct the year-end settlement including the aggregate of wage & salary incomes at the former work place.
3 Year-end Tax Settlement by the Taxpayers' Associations

The person who has joined a taxpayer association and who has one of the followings can conduct the Year-end Tax Settlement through the taxpayer association. Wage & salary income received from a foreign organization or the UN forces stationed in Korea (Except US army) Wage & salary income received from a non-resident living in a foreign country or a foreign corporation (Except domestic branches or domestic places of business)
In case of not conducting the Year-end Tax Settlement
If a withholding agent is not available for the bankruptcy or missing, etc., the employee shall file a final tax return for the wage & salary income at the district tax office concerned from May 1st to May 31st of next year.
5 Employee who retires during the year

In case where an employee retires during the year, the withholding agent must conduct year-end settlement when he/she pays the earning of retiring month and issue the receipt for the wage & salary income taxes withholding.
22
TIP
Is the year-end tax settlement applicable to daily w orkers? It is not applicable to daily workers. When is the year-end tax settlement for w orkers having temporary rest? For the workers having temporary rest, the year-end tax settlement is to be completed at the time of payment of the February of the following year, same as workers on continuous employment. When is the year-end tax settlement for w orkers on continuous employment? Their year-end tax settlement should be completed at the time of payment for the work provided in February in the following year is paid. If payment for the work provided in February is not paid by the end of February or there is no payment for the work provided in February, then the settlement should be completed by the end of February. When a w age and salary w orker has received payment from tw o different w orking places, w hat happens if the w age and salary w orker does not present the receipt for w age and income tax w ithholding of the former w orkplace to the latter w ithholding agent? If the wage and salary worker does not present the receipt for wage and salary income tax withholding of the former workplace to the latter withholding agent, the latter withholding agent of the current workplace cannot complete the year-end tax settlement for the entire taxable period (The latter can only conduct the year-end tax settlement for the period the worker has worked for the latter company). In this case, the worker is subject to filing a global income tax return for both incomes at the appropriate district tax office by the end of May of the following year. How do I claim for a refund w hen my year-end tax settlement tells me that I am applicable for the refund? When a refund occurs, your employer will directly refund the difference to you. No application for a claim is required. What should I do if I receive additional w age & salary income after conducting the Y ear-end tax settlement? If you get additional wage & salary income for your work made in the attributable tax period after conducting the Year-end tax settlement, the Year-end tax settlement should be conducted again at the time you receive the additional income. I have employment income from both Korea and another country. D o I need to report the income that I earned from another country w hen filing my year-end tax settlement return? Yes. When filing your year-end tax settlement return with the Korean tax office, you will need to report all of the employment income you have earned for that tax year, If you have stayed in Korea for more than 5 years during past 10 years. You are entitled to foreign tax credits for the taxes that you have already paid in another country.
. Introduction
23
E. Things to Prepare for the Year-end Tax Settlem ent
Proof of Documents for Deductions
Employees shall submit the documents required for deductions, tax exemptions and tax credits by the law to prove the expenses within the period of year-end settlement to the withholding agent. If an employee fails to submit the required documents within the period, the withholding agent conducts the year-end tax settlement by applying basic deduction and standard deduction only. Therefore, he/she must file the final composite income tax return not later than May 31st to the district tax office concerned to enjoy the benefits of deductions. In case where an employee who applies incorrect amount of deductions by submitting false or fake receipts, he/she shall be imposed the tax for the incorrect deductions and penalties later by the law.
2 Certificate of the Facts of Alien Registration

As an alternative to the Resident Registration Certificate that Korean citizens are required to submit, a foreign resident shall attach a Certificate of the Fact of Alien Registration(issued by the head of the Immigration District Office or its operating branch, Mayor of the City, Head of the County, or Head of the District) to the Report of Exemption and Deduction from Wage & Salary Income for submission to the withholding agent.
TIP
How do I find out the outcome of the year-end tax settlement? You can check the outcome of the year-end tax settlement as follows; You can ask for a receipt for wage and salary income tax withholding from your withholding agent. The withholding agent should present a receipt for wage and salary income tax withholding by the end of February of the following year. The receipt contains information on the final tax liability including details of your income and taxes. If the withholding agent submits the statement on wage and salary income payment to the NTS by the 10th day of March next year, you can check the statement on wage and salary income payment via the Hometax service starting from following May. * Hometax service is available in Korean only.
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Summary of evidence and documentation for income deduction
Document
Report of Exemption & Deduction from Wage & Salary Income Certificate of the facts of Alien Registration
Eligibility
All wage and salary income earners subject to the year-end tax settlement Employees hired in 2010 Employees with changes in dependents Employees who bought a policy of life, property loss, and accident insurance Employees who paid more than 3% of Gross wage & salary income as medical payments Employees whose dependents or him/ herself are students Wage and salary income earners who made donations to charitable foundations Wage and salary income earners subject to deduction for credit card usage Wage and salary income earners subject to deduction for credit card usage Taxpayer who chooses separate taxation method with 15% flat rate
Prepared by
Taxpayer
Immigration office or city, county, or district office
Copy of Receipt for Insurance Payment
Insurance company
Copy of Receipt for Medical Expenses
Hospitals, pharmacies, etc.
Copy of Receipt for Education Expenses Copy of Receipt for Donation Report for Deduction of Credit Card Usage, etc.
School or vocational training facilities Organizations who received donations Taxpayer
Receipt of Credit card payments
Credit card, debit card, prepaid card companies, etc.
Application Report of Flat Tax Rate for Foreign Employees Application for foreign engineers' tax reduction
Taxpayer
Foreign employees who meet the requirements under the relevant law
Taxpayer
Exemption Report of Foreigner's Employment Income
Qualified foreign employees who was dispatched to Korea by the agreement b/w the governments
Taxpayer
Foreign Tax Credit Report
Taxpayer who worked and paid the income tax in foreign countries
Taxpayer

Year-end Tax Settlement for Wage & Salary Income
. Year-end Tax Settlement for Wage & Salary Income
27
A.
1
Scope of Wage & Salary Income

What is Wage & Salary Income
At the first stage, as seen in the flow chart(page 2), to get the amount of gross wage & salary income, the amount of non-taxable income is deducted from the total income from employment, which includes all kinds of salary, bonus and allowances. An employee's wage & salary income subject to Korean income taxation is the amount received as payment for labor performed in Korea. For examples : ) Wage, salary, remuneration, allowance, bonus and any other allowance of a similar nature received in return for services ) Income received as a bonus by a resolution at the stockholders or partners general meeting of a corporation, or a similar deliberative organ ) Amount treated as bonus under the Corporation Tax Law ) Income other than retirement income, received due to retirement ) Income such as labor allowance, family allowance, duty allowance, etc. ) Income such as meal allowance, housing allowance, uniform allowance, etc. ) Income such as rewards, compensation, scholarship, etc. ) Benefits incurred by getting housing ) The insurance premium, trust installment or mutual aids installment imposed on the employer in connection with the insurance, trust or mutual aids whose contractor is an employee and whose beneficiary is an employee, his spouse, or other family member. ) Wages and salaries received from a non-resident or foreign corporation outside Korea ) Income incurred from exercise of stock options granted by foreign associated company
2 Income That Is Not Regarded As Employment Income

Any income accruing from the difference between the acquisition value of such stocks that is acquired by a member of employee stockholders association determined by the law and decree and the market value on the acquisition date.
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Benefits obtained from a house provision which is provided to an executive who is neither a stockholder nor a contributor, an employee who is not an executive and the person who is paid the earned income by the State or local governments.
3 Non-taxable Wage & Salary Income
Non-taxable income is the income for which the Korea government waives its taxing rights. Whether an application for non-taxation is made or not, such income is not taxable, some of which are as follows : ) Up to 200,000 per month of research subsidies or research activity expenses received by the following persons will be exempt from taxes: Faculties employed in schools as covered by education laws governing early education and primary, intermediary, and secondary schools; or educational The tax exemption does not apply to the following: (1) Persons directly involved in research activity (provided that they are university or college faculties or of equivalent status) (2) Persons engaged in the routine management of the building, e.g., security, maintenance, repair, cleaning, etc. (3) Persons involved in the provision of meals or driving of vehicles Persons directly involved in research activities at a small and mid-sized company or venture startup as prescribed by Article 15 (1) 1 and 3 of the Enforcement Decree of the Technology Development Promotion Act. ) Pensions or payments of a consolation nature receivable by a person injured while working ) Education fees prescribed by Presidential decree ) Compensation for actual expenses such as ; wages that are received by a worker due to natural disasters and other calamities, pays for day duty, night watch, or business travel compensation for driving one's own car for business purpose : limit is 200,000 per month ) Wages receivable by persons serving with a foreign government or the U.N. and organizations thereof; in the case of a foreign government, the principle of reciprocity shall be applied. ) Wages receivable by furnishing work or services overseas as follows: Payment of up to 1,000,000 per month receivable from furnishing service overseas Payment of up to 1,500,000 per month receivable for deep-sea fishery outbound ship workers and an overseas construction workers
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Overseas service allowance of public officials, etc. ) Expense reimbursement, such as travel expense reimbursement ) Allowance for Night Duty received by manufacturing employees : up to 2,400,000 per annum ) Meal costs of up to 100,000 per month, Qualified School Expenses, etc. ) Payment receivable by an enlisted person in the armed forces or a person mobilized under law ) Allowance for childbirth or childcare of children at the age of 6 years or younger : limit is 100,000 per month ) Childcare leave allowances received under the relevant Acts and subordinate statutes by a public official under the State Public Officials Act or the Local Public Officials Act,
TIP
Which category does remuneration for giving lectures fall into among w age & salary income, other income, and business income? If there is an employment contract, then the remuneration is categorized as a wage & salary income. Remuneration for the lecture in a temporary period is categorized as other income. If the employment status of the lecturer is independent contractor ("free-lancer") and the lecture is given repeatedly and continuously, then the remuneration is categorized as a business income. A re foreign executives' meal expenses not more than 100 thousand w on and corporate subsidy for car-driving not more than 200 thousand w on eligible for tax exemption? Yes. Meal expenses and corporate subsidy for car-driving are treated as the cost-compensatory pay. Therefore, tax exemption for meal expenses and corporate subsidy for car-driving is applicable to corporate executives.
B. Deduction for Wage & Salary Income

In respect of a resident (or non-resident) having any wage & salary income, the following amount shall be deducted from the amount of gross wage & salary income in the current year to work out the adjusted wage & salary income.
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Amount of Gross Wage & Salary Income

up to 5,000,000 over 5,000,000up to 15,000,000 over 15,000,000up to 30,000,000 over 30,000,000up to 45,000,000 over 45,000,000
Deduction Amount
80% of the total amount 4,000,000 + 50% of the excess over 5,000,000 9,000,000 + 15% of the excess over 15,000,000 11,250,000 + 10% of the excess over 30,000,000 12,750,000 + 5% of the excess over 45,000,000
C.
Personal Deduction
With respect to Personal Deduction, a taxpayer is qualified for the income allowance such as Basic Deduction", "Additional Deduction", "Additional Deduction for Households with Multiple Children".
Regarding the eligibility for Personal Deductions, persons eligible for spouse deduction, dependents deduction, or exemption for handicapped or aged persons must be family members who are listed on the Registration Card and actually living at the same domicile or residence with the taxpayer. A person who has temporarily left the taxpayer's domicile or residence for reasons of schooling, medical treatment, business, or work may still be entitled to the deduction. The determination of eligibility shall be made based on the existing conditions at the close of the tax period in question.
A Wage & Salary Income earner, whose family status already declared to NTS is changed, has to submit an application for personal deductions with documentary evidences before receiving Wage & Salary Income for January of each year.
Basic Deduction
A resident with Wage & Salary Income is entitled to an annual deduction for an amount calculated by multiplying the number of family members falling under any of the following sub-paragraphs by 1,500,000 per capita.
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) a resident taxpayer him/herself ) a person who is the spouse of the taxpayer and lives with the taxpayer, and has no annual income, or whose annual income (total amount of aggregate income, retirement income, and transfer income) is not more than 1,000,000 in the aggregate. ) dependents living in the same household with the taxpayer. A dependent means a lineal family member or a brother/sister who is 20 years or under or 60 years old or more supported by the taxpayer and who has no income or whose annual income (total amount of aggregate income, retirement income, and transfer income) is not more than 1,000,000 ) the handicapped spouse of a handicapped person who is a linear descendant of the taxpayer is eligible for basic deduction. ) Children under 18 years old under foster care for the relevant taxable period of more than 6 months according to the Infant Care Act
Tax Exemption Subjects
Condition
Age N/A N/A
Income Amount N/A
Taxpayer himself/herself Regardless of living together in the same house Spouse Living together on the resident registration (including living separately under residential situation)
Linear Ascendant
60 or older (Before birth of Dec. 31, 1950)
Linear Descendant/ adopted
Brother / sister Individuals in need supported by the National Basic Living Security Act Children under foster care
20 or less Annual Dependant Living together on (After birth of Jan. 1, Income 1990) family the resident amount of 20 or less members registration(excludi one million OR living ng linear won or less 60 or older together descendant and the adopted) - a temporal leave N/A due to school attendance, illness, medical treatment, Less than 18 etc. is permitted. (After birth of Jan. 1, 1993)
* In the case of a foreign taxpayer, a Certificate of the Facts of Alien Registration is required for Basic Deduction.
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2 Additional Deduction
When a person who is qualified for Basic Deduction (oneself, his/her spouse, dependents) falls under any of the following situation, the amount calculated by multiplying the number of persons by the amount below, shall be deducted each year from the taxpayer's income under each case. ) where the person is 70 years old or more: 1,000,000 per capita ) where the person is handicapped : 2,000,000 per capita ) where the person is a married woman having her spouse, or a spouseless female head of family having dependents : 500,000 per capita ) where the person who has a lineal descendant or an adoptee or foster child at the age of 6 years or less : 1,000,000 per capita ) where the person has a linear descendant born or an adoptee who he/she reported for adoption2,000,000 per capita
3 Additional Deduction for Households with Multiple Children

An additional deduction is allowed for residents with wage and salary income or business income (provided the resident is not a daily or temporary worker) at amounts that vary depending on the number of child/children with eligibility for basic deduction. An additional deduction is allowed at 500,000 per year where the number of children is two, and at 1,000,000 per child after the first two children. (Grandchildren are not eligible for Additional Deduction for Households with Multiple Children.) Calculation Table With 2 eligible children : 500,000 With 3 eligible children : 1,500,000 With 4 eligible children : 2,500,000 With 5 eligible children : 3,500,000
4 Timing of Determination for Eligibility

Determination of eligibility for deductions as a spouse, dependent, handicapped, or the aged is made in consideration of the factual circumstances as of December 31, the final day of the current tax year.
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However, in cases of death or recovery from the physical handicap, determination of eligibility is made in consideration of the factual circumstances as of the date coming one day before the date of the death or recovery. Where the dependent has to be within a certain age range to obtain eligibility, the dependent will be deemed eligible if he or she falls within that age range for any one day during the taxable year. Spouse deduction is not available in cases where the filer had divorced his/her spouse during the current tax year.
5 Maximum Deductibility for Personal Deductions
When the combined amount of personal deductions exceeds global income (or for wage and salary income, the amount of total wage and salary income less income deductions), the excess amount is non-deductible. If the taxation period or period supporting dependents is less than one year, the applicable basic deductions or additional deductions are not calculated in proportion to the applicable period, but the entire year's worth of deduction is taken from the tax base.
TIP
Can I claim basic deductions for my parents w hom I do not live w ith? Yes, as long as your parents meet the income and age requirement, if you are effectively supporting them, and if your siblings have not already claimed basic deduction for your parents. Persons qualifying for basic deduction are dependents whom the family register shows as living together with the filer, and whom live together in the address (or domicile) of the filer. However, you may receive basic deductions for linear ascendants even if they do not live with you (1) if you support them financially, (2) if they meet age and income requirements, and (3) if your other siblings have not already claimed basic deductions.
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TIP
If I'm a non-resident, can I take basic deductions for dependent family members? When a wage and salary earner is a non-resident, he/she cannot take personal deductions for dependent family members other than the filer him/herself, nor take special deductions. Non-residents are applied the same provisions on the calculation of the taxable income base and payable tax amount as they are applied to residents, but cannot claim special deductions and personal deductions (i.e., basic deductions, additional deductions, additional deductions for multiple children) for persons other than their own selves. Therefore, non-residents are not eligible for special deductions, basic deductions for spouse and dependent family members, additional deductions, or special deductions for multiple children.
Can I take deductions for dependent family members w ho reside back in my home country? Yes, a foreign resident with wage and salary income may take basic deductions, additional deductions and special deductions for qualifying spouse and dependent family members as long as they are supported by the foreign resident. To take the deduction, you are required to submit documentation proving your relationship with your spouse or dependent family members. One requirement for basic deductions is "1 million KRW or less in combined annual income." What exactly are included in "combined annual income"? Combined annual income refers to the combined amount of global income (i.e., wage and salary income, business income, interest income, dividend, pension benefits, and other income. However it does not include non-taxable income or income subject to separate taxation), retirement income, and capital gains income.
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TIP
If I w as employed in the middle of the tax year, how do I claim my basic/additional/special/credit card, etc. deductions? D o I divide the amount on a monthly basis? No. Even if you were employed only a number of months out of a year, you are allowed to take the entire yearly-deductions. However, certain special deductions (e.g., insurance premium deductions, medical expenses deductions, educational expenses deductions, and housing fund deductions), deductions for credit card, etc., deductions for Home Purchase Savings, and other applicable deductions are allowed only for residents with wage and salary income, and therefore can be taken only for the expenses incurred during employment.
D.
Pension Contribution Deduction
The total of the following pension contribution paid for pension insurance in the name of the taxpayer him/herself is deducted. a. Pension insurance contribution paid by the taxpayer him/herself based on National Pension Law b. Contribution paid by the taxpayer him/herself based on Soldier Pension Law, Civil Service Pension Law etc. c. Contribution paid by the taxpayer under the Employee Retirement Security Law
E.
Special Deduction
Special deduction is allowed from a resident's wage and salary income earned during the current year for expenses paid during the current year, where those expenses fall under the category as prescribed by the law. To claim special deductions, a taxpayer must submit necessary supporting documents when filing an application for income deduction. Where the deductible amount exceeds the taxpayer's income, the exceeding amount will be counted as zero. Under the provision of the third clause of the Article 216 of the Enforcement Decree of the Income Tax Act, where the taxpayer submits documentary evidence of income deduction to the
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Commissioner of the National Tax Service, he/she can use documents issued in the Simplified Year-end Tax Settlement Service A taxpayer who has not submitted supporting documents for deduction or has a special deduction amount under 1,000,000 may receive 1,000,000 deduction a year without submission of the supporting documents(standard deduction).
Insurance Premiums
Qualified insurance premiums include those paid by a Wage & Salary income earners to Korean insurance companies (including Korean branches of foreign insurance companies) located in Korea relative to the following types of insurance (beneficiary can be either the taxpayer or the dependents who have no income for the year): Life insurance, Life insurance for the handicapped, Damage & Accident Insurance, Fire and Burglary Insurance and insurance similar thereto. Types of Insurance National Health Insurance Premium Employment Insurance Premium Long-term Senior Nursing Insurance Premium Other Security Insurance Handicapped Only Security Insurance Deduction Amount total amount total amount total amount up to 1,000,000 up to 1,000,000
To apply for the deduction, supporting documents (e.g., original insurance premium receipts, not copies) must be attached to the Report of Exemption and Deduction from Wage & Salary Income. Insurance premium receipts issued by the insurance company will indicate whether or not such insurance premiums qualify for an income tax deduction. If supporting documents are not readily available, then a certificate of payment of insurance premium issued by the concerned insurance company must be attached to the Report.
2 Medical Expenses
Qualified medical expenses are those paid out to hospitals or drug stores in Korea for the taxpayer him/herself and his/her dependents who live in Korea with him/her. Eligibility for medical expense deduction will not be limited by age or income.
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Expenses paid for aesthetic or cosmetic surgery, and cost of purchasing pharmaceutical or medical products for the purpose of maintaining good health which were deductible in 2009 are not deductible from this year. Deduction for qualified medical expenses are allowed up to a maximum of 7,000,000 to the extent that such expenses exceed 3% of gross wage & salary income. However, 7,000,000 ceiling does not apply to the deduction for medical expenses where those expenses are paid for the medical treatment of the filer or dependents who are senior citizens(65 years or more) or are handicapped. For deduction, supporting documents (e.g., original receipts) must be attached to the report.
3 Education Expenses
Qualified education expenses are those expenses, such as school entrance fees, tuition and any other qualified school payments, paid by a Wage & Salary Income earner for the taxpayer him/herself or his/her qualified spouse or dependents (deduction will not apply for the graduate school expenses paid for the spouse or dependents). Limitation for this deduction is as follows : ) Employee himself(herself) : No limitation, Graduate school is included in the qualified educational facilities(includes course fees at the vocational competency development and training facilities) for taxpayer himself(herself). ) Kindergarten : 3,000,000 /person ) Elementary School, Secondary & High School : 3,000,000 /person ) University & College (does not include graduate-level studies) : 9,000,000 /person Education expense from the overseas educational institutes that is equivalent to the school of Korea under the Elementary and Secondary Education Act or the Higher Education Act may be deducted also under certain limit. However, if the resident paying those overseas educational expenses is employed in Korea, deductibility is allowed only for educational expenses incurred by a student meeting the "self-funding studies requirement." For tax deduction, supporting documents (e.g., original receipts, not copies) must be attached to the Report. Where supporting documents are not readily available, then a certificate for payments of tuition fees issued by the principal of the respective school must be attached. Appropriate exchange rate to apply in calculating overseas educational fees : ) When money is transmitted from Korea : Foreign currency exchange rate applied to bank customers on the date of the transfer ) When money is paid from outside Korea : Basic rate or arbitrage rate based on the Foreign Exchange Transaction Act is applied.
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4 Donations
Donations made by a resident in the applicable tax period can be deducted from his/her global income. The donations include the amount donated by the taxpayer's qualified spouse or linear descendants. Qualified donations include amounts disbursed in Korea for the following purposes : ) Statutory donation : Amount up to adjusted wage & salary income(No Limit) Donations to the Korean government or local autonomous government bodies (either in cash or in kind) Donations for national defense purposes (in cash) Donations to welfare facilities prescribed by the Presidential Decree, which are available for public use free of charges or at practical charges from among welfare facilities installed under the Social Services Act. Donations to government relief funds relative to disasters, earthquakes, floods and other calamities. Other calamities are limited to calamities categorized as special calamity areas according to the Framework Act on the Management of Disasters and Safety. Consideration for the voluntary support served in Special Disaster Area Donations made to cover costs required for facilities, education, scholarship, or research in private schools under the Private School Act, technical colleges under the Technical College Act, hospitals attached to national universities, College of Seoul National University and Industrial & Educational Corporation Corps. were added. ) Political fund donation : Amount up to adjusted wage & salary income(No Limit) Donations to political party , etc. as prescribed by the Article 76 of the Restriction of Special Taxation Act. - Amount less than 100,000KRW : Paid Amount 100110 () - Amount over 100,000KRW : Paid Amount - 100,000KRW() * will be credited from the Calculated Income Tax, will be deducted from the Adjusted Wage & Salary Income ) 50% limit donation : Amount up to 50% of (adjusted wage & salary income --) Certain other donations as allowed by Article 73 of the Restriction of Special Taxation Act (e.g., Charitable donations contributed to the Independence Hall, constructed under the Independence Hall Act)
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) 30% limit donation : Amount up to 30% of (adjusted wage & salary income ---) Funds donated to the Employee Stock Ownership Association ) 10% limit donation : Amount up to {[10% of (adjusted wage & salary income ----) + the lesser of [10% of (adjusted wage & salary income ----) or Donation amount other than religious groups]} The 10% limit should be applied if organizations where donations were made include at least one religious groups. ) 20% limit donation : Amount up to 20% of (adjusted wage & salary income ----) The 20% limit should be applied if organizations where donations were made include no religious groups. Donations prescribed in Article 80 of the Enforcement Decree of the Income Tax Act (e.g., donations for the purpose of public interest of art, education etc. If the deduction amount of deductions exceeds the amount of the resident's global income in the applicable tax period, tax credits for each donation can be carried forward to a period from the first day of the next tax period up to 5 years. To obtain the deductions, supporting documents (e.g., original receipts, not copies) must be attached to the Report.
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TIP
I made my D ecember 2009 payment of life and illness insurance premium in January 2010. In this case, is this amount deductible from my 2009 tax base or my 2010 tax base? Deductibility is extended to premiums paid out in the current tax year. Therefore, the December 2009 premium you paid in January 2010 will be deducted from your 2010 tax base. Can I claim a medical expense deduction for medical expenses paid to hospitals located outside of Korea? No, only the amount paid to hospitals in Korea is deductible. If I only have my ow n medical bills, do my bills have to exceed 3% of the gross w age and salary income for me to claim deductions for medical expenses? Only the amount in excess of the 3% threshold is deductible. Therefore, even if there are no other medical bills than those of your own, you will be unable to take a deduction for medical bills when their total amount is less than 3% of your gross and salary income. If the amount accounted for through the documents I downloaded and printed out from the N TS Simplified Y ear-End Tax Settlement Service w ebsite is less than the actual amount I spent at medical institutions, how can I get deductions for those unaccounted expenses? If the NTS Simplified Year-End Tax Settlement does not cover all or has omitted some of your medical expenses, you can get your deductions by asking for supporting documents (sales receipt, etc.) from individual hospitals or pharmacies, and entering that amount in the "Other Documents" item in your income deductions claims form. The income deductions claims form should be submitted to your employer. Can a foreign wage and salary earner employed in Korea get deductions for educational expenses incurred by a child studying overseas (e.g., home country)? No. Only those educational expenses that meet both the "student" requirement and "overseas educational institute" requirement are deductible. The overseas educational institute has to be a "school" as interpreted under the Pre-School and Elementary/Middle/High School Law or Higher Education Law of the Youth Education Law of Korea, and The student has to be an international student studying at the invitation or admission by an overseas educational institute or research center, as prescribed by Article 5 or Article 15 of the "Regulations on Overseas Studies."
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TIP
Can I get a deduction for the donations I made to charitable organizations in another country? A deduction is allowed as long as the charitable organization is registered with responsible K orean authorities, or m eets other requirem ents stipulated in relevant Korean laws.
F. Other Deduction
These are itemized deductions which include Personal Pension Savings Deduction, Investment Association Deduction, and Credit Card Usage Deduction, etc. Among these deductions, Personal Pension Saving Deduction, Credit Card Usage Deduction, Deduction of Long-term stock-invested saving are canvassed herein, relevant for the purpose of this book.
Personal Pension Saving Deduction
When a resident joins personal pension saving or pension saving under his/her own name, the amount of saving made in the applicable tax period is deducted from the amount of global income of the applicable tax period.
Category Joining Subject Amount of deposit Period of saving
Personal Pension Saving Joined on/before Dec. 31, 2000 20 year old or older 3 million won or less quarterly 10 years or more
Pension Saving Joined on/after Jan. 1, 2001 8 year old or older 3 million won or less quarterly 10 years or more
pension received for a period of 5 pension received for a period of 5 years or longer after the subject years or longer after the subject pension payment becomes 55 years old once the becomes 55 years old once the after maturity saving matures. saving matures. Deduction rate Deduction ceiling 40% of yearly payment 720 thousand won per year 100% or yearly payment 3 million won per year (including retirment pension)
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2 Credit Card Usage Deduction

Expenditures by credit cards include the payments by credit cards, debit card, prepaid card with name registered, Cash receipt Usage, which are issued only in Korea in the name of taxpayer or his/her qualified spouse or dependents who have annual income less than 1,000,000 per annum. The credit cards amount spent only in Korea are subject to credit card usage deduction. And the credit cards expenses between Jan.1,2010Dec.31,2010 are subject to credit card usage deduction. Deduction amount and limit is as follows. Calculation of Deduction Amount Usage of Credit Card etc. = Credit Card + Cash receipt Usage + Tuition fee payment for private educational institutions (Hakwon) through Giro transfer Usage of Debit Card etc. = Debit Card + Prepaid Card Deduction Amount = + = [+-Gross wage & salary income of the year25%] [(+)] 20% = [+-Gross wage & salary income of the year25%] [(+)] 25% Limit of Deduction Amount = Min (20% of Gross wage & salary income, 3,000,000) However, the payments by credit cards for the following purposes are not entitled to the credit card usage deduction. ) Payments for company's expenses (e.g., entertainment made by an employee's credit card and reimbursed by the employer), ) Payments for national or local taxes, ) Payments for utilities (e.g., gas, telephone, etc.), ) Payments for social costs such as national health insurance, pension, etc., and ) Payments for education expenses. ) Monthly rent subject to income deduction ) Other Payments telephone charges include internet bill toll, apartment management fee, purchase price for gift certificates, etc. To obtain the deductions, supporting documents (e.g., certificates of credit card usage amount issued by the respective credit card companies) must be attached to the report.
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3 Deduction of Long-term stock-invested savings

When a resident has joined long-term stock-invested savings during the period from October 20, 2008 to December 31, 2009 and has made deposits, the deposit amount multiplied by a certain deduction rate in the applicable tax period is deducted from the amount of global income of the applicable tax period. The long-term stock-invested savings are the savings made to acquire stocks of an investment company or stocks/beneficiary certificates of an investment trust that makes investment in stocks of a company whose 60% of the total assets is issued and traded in Korea. The period of savings are 3 years or longer, and there should not be withdrawal of principal, interests, dividends, or stocks in less than 3 years. The long-term stock-invested savings are a installment-based savings for which a person should make a total deposit amount of 3 million won or less quarterly. Any resident who subscribed to long-term stock-invested fund may deduct certain percentage of the deposit amount as follow; 1st year20% of the payment 2nd year10% of the payment 3rd year5% of the payment
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TIP
Is usage of Cash Receipts different from credit cards in terms of income deduction? No. The Cash Receipt amount is added to the "credit card, etc." amount, which is then deducted from the income after deduction. How much of the amount of credit cards and Cash Receipts do I get back? To qualify, your combined amount of "credit cards, etc. (which includes your Cash Receipt amount)" must exceed 25% of your annual wage and salary income. Once the amount exceeds that threshold, the deductible amount is 20% of the amount in excess of the threshold. The amount you can receive is the amount after all qualified deductions, multiplied by applicable tax rate and tax credit. I already claimed deductions for medical bill under "deductions for medical expenses." If I made the payment w ith my credit card, can I take that same expense to claim "deductions for credit card, etc."? Yes, you may take the same amount to claim both "medical expense" deductions and "credit card, etc." deductions. Can I get deductions for the amount I spent using my credit card before I took my job, or after quitting? No. Only the amount you have spent during employment qualifies for deductions. Can I get credit card usage deductions for the amount I spent overseas w ith my credit card? No. Overseas expenses are non-deductible. If I left out certain deduction items during year-end tax settlement, can I still get deductions later on? Yes. You may ask for additional income deduction during Global Income Tax filing season, or by claiming refunds. For deductions left out by a wage and salary earner : He/She may file Global Income Tax Returns by May of the following year to the Head of the competent District Tax Office, or Pursuant to Article 45(2)4 of the Basic Framework on National Taxes, the filer or his/her withholding agent may request for a tax refund. However, a tax refund claim can be made only when the filer had completed the year-end tax settlement, and when the withholding agent had submitted the Statement of Wage and Salary Payment by the legal submission date (by March 10 of the following year), as long as the refund is claimed within three years.
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G.
1
Calculated Income Tax

Tax Base (Taxable Income)
Taxable Income is calculated after Personal Deduction, Pension Contribution Deduction, Special Deduction and Other Income Deduction have been made from the amount of Adjusted Wage & Salary Income.
2 Tax Rates and Tax Amount

After Tax Base is calculated from Adjusted Wage & Salary Income minus Income Deductions, the amounts of income tax is calculated by applying progressive marginal tax rates to respective tax base, as seen in the following table. Tax Base up to 12,000,000 over 12,000,000up to 46,000,000 over 46,000,000up to 88,000,000 over 88,000,000 Tax Rates 6% 720,000+15% of the AMT over 12M 5,820,000+24% of the AMT over 46M 15,900,000+35% of the AMT over 88M
H. Tax Exemption & Tax Credit

1 Tax Credit for Wage & Salary Income
The following amount shall be credited against total tax on Wage & Salary Income. Where the amount of credit exceeds 500,000, the credit is limited to 500,000 Tax Amount up to 500,000 over 500,000 Amount of Tax Credit 55% of total tax 275,000 + 30% of amount over 500,000
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2 Taxpayers' Association Credit

When a person receives wage & salary income from foreign organization, the UN forces stationed in Korea (Except US army), non-residents living in a foreign country, or a foreign corporation, if he/she has joined a taxpayer association, the taxpayer association should withdraw income tax every month by the simplified table of income tax rate. 10% of the calculated income tax amount shall be deducted and withdrawn. When conducting the year-end tax settlement, the deducted amount of 10% of the settled tax amount of wage and salary income subject to income tax withholding by the taxpayer association is collected as a tax. However, if a foreign taxpayer choose separate taxation with 15% flat rate under Article 18-2 under the Restriction of Special Taxation Act, this credit will not be applied.
The person who has joined a taxpayer association and who has one of the followings can conduct the Year-end Tax Settlement through the taxpayer association. Wage & salary income received from a foreign organization or the UN forces stationed in Korea (Except US army) Wage & salary income received from a non-resident living in a foreign country or a foreign corporation (Except domestic branches or domestic places of business)
Foreign Tax Credit
In case where any foreign source Wage & Salary Income is added to the domestic Wage & Salary Income amount of a taxpayer, if the foreign income tax amount as determined by the Presidential Decree is paid or payable in a foreign country with respect to such income of the foreign source, the taxpayer is eligible for foreign tax credit. For application of this credit, supporting documents such as Foreign Tax Credit Statement, Foreign Tax Credit Receipt are required to be submitted to the NTS. If the taxpayer cannot submit the application with a final return of tax base due to foreign tax authorities' delay in making a notice of determination on the foreign source wage and salary income or difference in tax period, he/she can submit the application within 45 days from the day he/she receives the notice of determination.
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Converting the tax amount paid overseas into won should be based on the basic exchange rate as of the day of tax payment or arbitrated rate of exchange. Penalty and additional charges are excluded from tax amount paid overseas subject to deduction. The foreign income tax amount may be credited from the calculated income tax amount in the current year, within the limit of the amount calculated as follow Ceiling of tax credits wage & salary income tax amount calculated foreign source wage & salary income wage & salary income Tax credits exceeding the ceiling can be carried forward for 5 years.
4 Tax Exemption for Foreign Engineers

A foreign engineer who falls under the Enforcement Decree of RSTA 16 shall be allowed to be exempted by 50% from income tax on employment income derived from the provision of his services to a national within Korea if such employment income has been earned until the month whereto belongs the date on which 2 years have passed since the first date (December 31, 2011 or earlier) on which the foreign engineer provided his services in Korea. (RSTA 18 ) A foreign engineer shall be allowed to be exempted by 50% from income tax on employment income derived by providing his services to a national within Korea under a contract for the introduction of technologies as referred to in the Foreign Investment Promotion Act. In this case the exemption amount shall be limited to the income earned until the month whereto belongs the date on which 2 years have passed since the date of delivery (December 31, 2011 or earlier) of the certificate of report on a contract for the introduction of such technologies. (RSTA 18 ) For foreign engineers whose first date of service is rendered on/before December 31, 2009 and foreign engineers who provide service according to a reported contract of technology introduction, 100% tax exemption is applicable for 5 years, the same as before. Foreign engineer shall file a written application for tax exemption to the tax office not later than the 10th of the month next to that whereto belongs the day on which he has provided a service.
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Reduced tax amount wage & salary income tax amount calculated wage & salary income amount subject to tax reduction50% wage & salary income
5 Tax Exemption for Teachers and Professors
Instructors (teachers and professors) of foreign nationalities are generally taxed on their wage and salary income following the identical taxation process as applied to resident Koreans. However, when instructors meet the non-taxation requirements stipulated in the relevant provisions under the tax treaty, they qualify for non-taxation treatment on the wage and salary income that were generated in Korea for the treaty-specified (three years with China, but two years in general with other countries). How to claim non-taxation treatment A foreign nationality teacher/professor employed by a school must submit an application form in order to receive non-taxation treatment. Failure to submit the application will result in taxation of the income. Persons wishing to receive non-taxation treatment must submit the "Application Form for Non-Taxation of Wage and Salary Income Pursuant to Tax Treaties" and the following documents to the school (the payer of the wage and salary income). The school must then submit the documents to the competent district tax office by the 9th day of the month following the month the first wage and salary income payment was made. All documents, including the application form, must be prepared and submitted in two copies.
* Required documents for submission
1. Certificate of residency 2. Copy of employment agreement with the school 3. Copy of documents proving the instructor's qualification for non-taxation
49
I.
1
Taxes Due
Calculation of Payable / Refundable Tax
After tax credit is made, the calculated tax amount comes out. Then, the pre-paid income tax amount, which has been withheld by an employee's withholding agent based on Simplified Tax Withholding Table and paid to NTS monthly, is deducted from the adjusted tax amount to work out the amount payable or refundable.
2 Special Tax for Rural Development
U nder the Law of Special Tax for R ural D evelopm ent, an individual w hose tax liability has reduced under the R estriction of Special Taxation A ct, Local Tax Law , or C ustom s Law has responsibility of paying the Special Tax for R ural D evelopm ent(STR D ). A ccordingly, STR D is levied as a surtax on the am ount of exem ption of individual incom e tax and is calculated by m ultiplying 20% by tax base of STR D , w hich is the total of H om e M ortgage Interest C redit and the reduced tax am ount through Investm ent A ssociation D eduction herein.
3 Local Income Tax
Local Income Tax has two types : per capita and pro rata. The tax base of Pro rata Local Income Tax is the amount of income tax to be paid pursuant to the provisions of Income Tax Law. That is, individuals liable to the payment of income tax have a responsibility to pay local income tax. A surcharge, pro rata local income tax, is added to income tax in computing the total tax liability (10% of income tax).

Examples of Income Tax Calculation
53
Case #1. Workers receiving w age & salary income from a single w orkplace (1)
< Information >
Adam working for a private English school had Wage & Salary Income during 2010 as follows : He earned 2,500,000 every month.(Including compensation for driving one's own car of 100,000) His family members are as follows : Adam (age 25), Wilkins (Adam's Father, age 53), Mary (Adam's mother, age 50) (His parents live his home country with gross income of US$50,000 for the tax year) Detailed Items of Expenditures - National Pension contribution: 750,000 - Medical expenses: 450,000 - Cash receipt: 4,000,000, Debit card usage amount : 4,000,000 He didn't chose 15% flat tax rate under the article 18-2 of the RSTA. Withheld tax: 500,880(41,74012) (Local income tax is not included.)
< Calculation of Income Tax >

Total Income Non-taxable income Gross Wage & Salary Income Deduction for his Wage & Salary Income A djusted Wage & Salary Income Personal Deduction Basic Deduction Pension Contribution Deduction Special Deduction Standard Deduction Other Deduction Credit card usage etc. Taxable Income Calculated Income Tax (15%) Tax Credit for Wage & Salary Income Final Tax Liability Prepaid Tax Tax D ue 30,000,000 1,200,000 28,800,000 11,070,000 17,730,000 1,500,000 (11,500,000) 750,000 1,000,000
*1)
180,000 *2) 14,300,000 1,065,000 *3) 444,500 *4) 620,500 500,880 (41,74012) 119,620
*1) Total special deduction amount is under 1,000,000 *2) + = 180,000 [(4,000,000+4,000,000)-28,800,00025%)]4,000,0008,000,00020%= 80,000 [(4,000,000+4,000,000)-28,800,00025%)]4,000,0008,000,00025%= 100,000 *3) 720,000+[(14,300,000-12,000,000)15%] = 1,065,000 *4) 275,000+[(1,065,000-500,000)30%] = 444,500
54
Case #2. Workers receiving wage & salary income from a single workplace (2)
< Information >
Adam working for a private English school had Wage & Salary Income during 2010 as follows : He earned 3,000,000 every month. Adam has no non-taxable income. His family members are as follows: Adam (age 40), Mary (Adam's wife, age 35), David (Adam's son, age 5), Wilkins (Adam's Father, age 71) (His family members who are living together in the same house are qualified dependents with gross income of 1,000,000 or less for the tax year) He paid 500,000 for life insurance premium, 300,000 for national pension contribution, and 4,800,000 for education fee for David in Korea. He didn't chose 15% flat tax rate under the article 18-2 of the RSTA. The amount withheld monthly by his withholding agent (the school) is as follows: Based on the Simplified Tax Withholding Table(2010), the amount withheld matching his situation is 34,440 every month.(Local income tax is not included.)

Total Income Non-taxable income Gross Wage & Salary Income Deduction for his Wage & Salary Income A djusted Wage & Salary Income Personal Deduction Basic Deduction Additional Deduction Pension Contribution Deduction Special Deduction life insurance premium educational expense Taxable Income Calculated Income Tax (15%) Tax Credit for Wage & Salary Income Final Tax Liability Prepaid Tax Tax D ue
*1) The limit of Educational expense is 3,000,000
36,000,000 0 36,000,000 11,850,000 24,150,000 6,000,000 (41,500,000) 2,000,000 (21,000,000) 300,000 500,000 *1) 3,000,000 12,350,000 772,500 356,750 415,750 413,280 (34,44012) 2,470
55
Case #3. Workers receiving wage & salary income from two or more workplaces
< Information >
1) Taxpayer & his Employer Taxpayer: John P. (640101-5234567) Employer: ABC Co. (123-81-12345) 2) Taxpayer's Family John has his spouse, 2 children (age 13, age 5) and mother (age 75) (His family members are qualified dependents with gross income of 1,000,000 or less for the tax year) 3) Details of Wage & Salary income for each source Gross payroll (current job): 51,000,000 - Salary: 40,000,000 - Bonus: 10,000,000 - Allowance: 1,000,000 Gross payroll of the previous job (Woori co. 123-35-12342): 15,000,000 Tax Withheld (current + previous): 4,000,000 (other than Local income tax) John has no non-taxable income. 4) Detailed Items of Expenditures National Pension contribution: 500,000 Insurance premium - National Health Insurance Premium: 300,000 - Life Insurance Premium 600,000, Car Insurance Premium: 500,000 Medical expenses - Expense to hospital for spouse: 2,000,000 - Hospital charge for mother: 1,000,000 - Payment to drugstore for mother: 400,000 - Purchase of a pair of glasses for sight recovery for mother: 300,000 Education expenses - Kindergarten Fee for a child: 1,000,000 - Middle School Fee for a child: 1,500,000 Donation to government relief funds relative to floods: 900,000 Credit Card Usage: 15,200,000 (Cash Credit Service 2,500,000 is included.)
56

Global Taxation Method with Basic Tax Rate
Total Income Non-taxable income Gross Wage & Salary Income Deduction for his Wage & Salary Income A djusted Wage & Salary Income Personal Deduction - Basic Deduction - Additional Deduction - For Households with Many Children Pension Contribution Deduction Special Deduction - insurance premium National Health Insurance Other Premium - medical expense - educational expense - donation - credit card usage Taxable Income Calculated Income Tax(15%) Tax Credit for Wage & Salary Income Final Tax Liability Prepaid Tax Tax D ue
66,000,000 0 66,000,000 13,800,000 52,200,000 7,500,000 (51,500,000) 2,000,000

*1)
500,000 500,000
300,000 1,000,000 1,720,000 *2) 2,500,000 900,000 0 *3) 35,280,000 4,212,000 500,000 3,712,000 4,000,000 288,000
Separate Taxation Method with 15% Flat Rate Final Tax Liability = 66,000,000 15% = 9,900,000 *1) the aged(1,000,000) & child under 6 years old(1,000,000) *2) expenses(3,700,000) - 3% of gross wage & salary(3% x 66,000,000) *3) Cash credit service is not included in eligible credit card usage 20% x {(15,200,000 - 2,500,000) - (25% x 66,000,000)}
57
[Tax Form 24(1)] <Revised on August 6. 2010>
(Page 1)
Residency
Resident 1./Non-Resident 2
Control No.
Receipt for Wage & Salary Income Tax Withholding Statement on Wage & Salary Income Payment ( For Employee For Employer For issuer to summit to tax office)
Cn ou try Country Code Nationality Citizen 1/Foreigner 9 Application of Flat tax rate Yes 1 / No 2 Nationality Nationality Code Householder 1, Household Member2 Year-end Tax Under employment 1, Settlement Retired 2
5 - 9 3 4 2 3 4 4 1 - 5 2 3 4 5 6 7 P.Paul 5 6 0 4 0 6 4 0 1 0 -1Taxpayer Association
Employer Employee (Taxpayer)
Company Name Tax Reg. No. Address Name Address Description
ABC Co. Representative Name 1 2 3 - 8 1 - 1 2 3 4 5 Resident(Alien) Reg. No. 101-1 Jongro-1ga, Jongro-gu, Seoul John P. Resident(Alien) Reg. No. 200 Jongro-1ga, Jongro-gu, Seoul Current Job ABC Co. 123- 81- 12345 40,000,000 10,000,000 1,000,000 Previous Job Woori Co. 1 23- 3 5- 12 342 15,000,000 0 0 Previous Job
Total
Company Name Tax Reg. No. Length of Service Attributable Details Period of Tax Exemption of Income by Gross Payroll Gross Bonus Deemed Bonus
55,000,000 10,000,000 1,000,000
Company -1 Stock Option Execution Profit -2 -3 -4 Total M01 O01 Q01 X01 51,000,000 15,000,000 66,000,000 Employee Stock Drawings Ownership Assoc.
Overseas Allowances -1 Night time Allowances -2 Childbirth and Child Care Allowances -3 Exemption employee Non-taxable -4 -5 Income ~ -20 Designated tax exemption Total -1 Total reduction from income for Foreign
Classification Final Tax Liability 123-35-12342 Tax Prepaid Tax Previous Job Tax Reg. No.
Income Tax 3,712,000 1,000,000
Local income Tax 371,200 100,000
Special Tax for Agriculture
Total 4,083,200 1,100,000
Current Job Taxes Due
3,000,000 288,000
300,000 28,800
3,300,000 316,800
We acknowledge the withholding (or payment) of above taxes (or payroll income). February, 2011 Taxes withheld by (Signature or seal) To Head of O O District Tax Office 210297
58
(Page 2)
Gross Wage & Salary( Or - -3) Deduction for Wage & Salary Income Adjusted Wage & Salary Income Employee Basic Spouse Deduct ion Dependents (No. of dependents: 3) The Aged (No. of the aged: 1) The Handicapped (No. of the handicapped:
Additi onal Women Deduct Children under 6Yrs ion (No. of children: 1)
66,000,000 13,800,000 52,200,000 1,500,000 1,500,000
Personal Deduction
Pension
Savings
Pension Savings Deduction -1 Deductions for Contribution of Small-sized Company and Self-employed Mutual aid association Saving for subscription
Housing Total -2Deduc subscription saving Other 4,500,,000 Deduct tions for Long-term home housing purchasing saving ion fund 1,000,000 by Worker's home Special purchasing savings Taxati Investment Association on Deduction Credit Card Usage Deduction
1,000,000
Employee Stock Ownership

Deduction Long-term stock-invested savings deduction -1 S/M enterprises which maintain employment
-1 Newly Born / Newly Adopted (No. of newly born/adopted: )
For Households with Multiple Children For National Pension Contribution - 1 Government employee's pension Pension O t h e r Soldier's pension Items Pension Deduc C o ntri Contrib Private school employee's pension bution ution Special post office pension tion Deduct Deduction for scientists and ion R e t i r e engineers m e n t Guarantee of Workers' Retirement Pension Benefits Health insurance Employment insurance I n s u ra Indemnity insurance nce Insurance for disabled Medical Expenses Education Expenses Specia Principal and interest payment of l home rental loans Deduct H ousin M onthly rent ion g Fund Interest payments of loans for long-term housing mortgage Donation Sub-Total Standard Deduction Income after Deduction
500,000 500,000
Sub-Total Taxable Income (Tax Base) Calculated Income Tax Income Tax Act Restriction Taxation Act Tax 300,000 Exemp tion 1,000,000
1,720,000 2,500,000 of Special
35,280,000 4,212,000
Total Exemptions Tax Credit for wage & salary income Taxpayer Assn. Credit
500,000
900,000
Tax Credit
Home Mortgage Interests Political Fund Donation Foreign Tax Credit Sub-Total
6,420,000
500,000 3,712,000
35,280,000
Final Tax Liability( --)
59
(Page 3)
Personal Deduction List (As for Personal Deduction, put in relevant items, and as for each item under Special Deduction, write down the
amount of money you actually spent.)
Relationship Code Name Basic Personal Deduction Special Deduction Insurance Credit Cards etc. Usage Deduction Newly Description Premium Citizen/For Resident(Alien) Reg. No. Born/ Handic under 6 (Health Insurance Medical Expenses Education Expenses Credit Card & Debit card, Wome Aged Newly apped years old eigner Cash Receipt Premium Check Card etc, etc. n Adopted included) NTS Data 1,400,000 3,700,000 2,500,000 12,700,000 No. of people eligible for personal deduction (No. of multiple children: ) Other Data 0 John P. NTS Data 1,400,000 12,700,000 (Myself) Other Data 9 3 Mrs. A NTS Data 2,000,000 Other Data 9 630102-6234001 1 Mrs. B NTS Data 1,700,000 9 350103-6456003 Other Data 4 Tom F NTS Data 1,500,000 9 960505-5234004 Other Data 4 Judy P NTS Data 1,000,000 9 050505-8234005 Other Data
Donation
900,000 900,000
Instruction
This form is used when a tax association specified in the Article 149(1) of the Income Tax Act conduct the year-end tax settlement for the earned income which falls into the category specified in the Article 127-1(4) of the Income Tax Act. Enter the company name and the registration number of which your actual working place for Company Name Tax Reg. No. If the business is not registered, enter the business registration number of the tax association.
1. The State of residence and code for state of residence field is only required for non-residents. The abbreviated name of country or the state code should be entered according to the International Organization for Standardization (ISO) code designated by the ISO. ( Checking the ISO country code : NTS website Resources Additional Info. ISO coutnry code). ex) Republic of Korea : KR, United States: US 2. For the nationality, check "Foreigner 9" if the wage/salary income earner is a foreigner and write the nationality code specified by the ISO country code. If applicable for flat tax rate, select "Yes 1" with submission of an Application of the flat tax rate. 3. Withholding agents must submit payment records by March 10 of the following year (or, by the end of the month which is two months after the suspension/closing of business) which includes the day of issuance. 4. .In the box, Details of Income by Company, enter the income amount not including non-taxable income. . The non-taxable income should be entered separately in the box by code (If there are too many non-taxable items, enter the total amount only in the the box , Non-taxable Income, and -1, Total reduction from income. III. Use another paper for details of non-taxable income. 5. When conducting the year-end tax settlement for the wage and salary income and other earned income specified in the Article 127-1(4) of the Income Tax Act, Enter data on taxpayer association in the -1 Taxpayer association section, and enter wage and salary income which falls into the Article 127-1(4) of the Income Tax Act. Enter the taxpayer association credit specified in the Article 150 of the Income Tax Act in the Taxpayer credit section. 6. Gross Wage & Salary: Enter the amount of Total. If the foreign worker wants application of a flat tax rate under the provision of RSTA12-2(3), he/she shall enter the sum of Total and non-taxable income amount. In this case, the regulation of non-taxation, deduction, exemption or tax credit related to the income tax are not applicable. ) ) 7. Fill in the global income special deduction ( section and other income deduction sections ( with the deduction amount from the Report of Exemption & Deduction from Income/ Report of Exemption & Deduction from Wage & Salary Income [Tax Form 37] 8. Enter numbers after removing digits below the decimal point, and In line , enter 0 when taxes due are not exceed 1,000. 9. Fill out "Personal Deduction List" referring to the followings a. Relationship Code
Category Income earner himself/herself (ITA 50 1) Spouse (ITA 50 2) Sibling (ITA 50 ) Relations hip code 0 3 6 Category Income earner's linear ascendant (ITA 50 3 ) Linear descendant(ChildAdopted) (ITA 50 3 ) Pension receiver(Except code1~6) (ITA 50 3 ) Relations hip code 1 4* 7 Category Spouse' linear ascendant (ITA 50 3 ) Linear descendant(Except code 4 ) (ITA 50 3 ) Fostered child (ITA 50 3 ) Relationship code 2 5* 8
* If the linear descendent and his/her spouse are both Total the handicapped, the spouse is included. Relationship code 46 includes the relationship with the income earner and his/her spouse respectively. b. Citizen/Foreigner : Citizen =1, Foreigner =9 c. For dependents subject to deduction, mark O on the corresponding column. d. NTS data : Enter the amount applicable for deduction when using data provided by the NTS as documentary evidence for income deduction under the provision of the article 165 of the Income Tax Act. e. Other data : Documentary evidence other than that provided by the NTS. For example, put the Giro receipt amount of private institutions in the "Credit card, etc" section and the cost of vision corrective glasses in the medical expenses. f. Enter the actual amount of expenses for each deduction section 10. If the wage & salary income earner received deduction for retirement pension, pension savings, Housing savings, long-term stock-invested savings, etc., he/she should submit respective statement along with the Statement on Wage & Salary Income Payment to the competent tax office.
60
Case #4. Foreign teachers whose entire wage & salary income is eligible for income tax exemption
< Information >
Scott working for a ABC University earned 50,000,000 as Wage & Salary Income during 2010. His family members are as follows: Scott (age 35), Jane (Scott's wife, age 37) (His wife is qualified dependent with gross income of 1,000,000 or less for the tax year) He paid 1,000,000 for national health insurance premium, 1,000,000 for national pension contribution. Scott has no non-taxable income. Credit card usage of 10,000,000 Cash receipt of 3,000,000 He was a resident of USA just before his entrance to Korea and hired as a professor of ABC University under 1 year employment contract.

Total Income Non-taxable income Gross Wage & Salary Income Deduction for his Wage & Salary Income A djusted Wage & Salary Income Personal Deduction Basic Deduction Pension Contribution Deduction Special Deduction national health insurance premium Other Deduction Credit Card Usage Deduction Taxable Income Calculated Income Tax (15%) Tax Exemption for teacher Tax Credit for Wage & Salary Income Final Tax Liability Prepaid Tax Tax D ue *1) (13,000,000-50,000,00025%)20% 50,000,000 0 50,000,000 13,000,000 37,000,000 3,000,000 1,000,000 1,000,000 100,000 *1) 31,900,000 3,705,000 3,705,000 0 0 0 0 (21,500,000)
61
[Tax Form 24(1)] <Revised on August 6. 2010> Residency Cn ou try Nationality
(Page 1) Resident 1./Non-Resident 2 Country Code Citizen 1/Foreigner 9 Yes 1 / No 2 Nationality Code Householder 1, Member2 Under employment 1, Retired 2
Control No.
Receipt for Wage & Salary Income Tax Withholding Statement on Wage & Salary Income Payment
Application of Flat tax rate Nationality Household Year-end Tax Settlement
( For Employee For Employer For issuer to summit to tax office)
ABC University Representative Name 1 2 3 - 8 2 - 1 2 3 4 5 Resident(Alien) Reg. No. 101-1 Jongro-1ga, Jongro-gu, Seoul Scott W. Doner Resident(Alien) Reg. No. 200 Jongro-1ga, Jongro-gu, Seoul Current Job ABC University 123-82-12345 50,000,000 Previous Job Previous Job
William Jackson 5 6 0 4 0 5 - 9 3 4 2 3 4 4 7 6 0 1 0 1 -1Taxpayer Association - 5 2 3 4 5 6 7
Total
Company Name Tax Reg. No. Details Period of Tax Exemption of Gross Payroll Length of Service Attributable
50,000,000
Income Gross Bonus by Deemed Bonus
Compan -1 Stock Option Execution Profit y -2 Employee Stock Ownership Assoc. Drawings -3 -4 Total M01 O01 Q01 X01 50,000,000 50,000,000
Overseas Allowances -1 Night time Allowances -2 Childbirth and Child Care Allowances -3 Exemption for Foreign employee -4 Non-taxab le -5 Income -20 Designated tax exemption Total -1 Total reduction from income ~
Classification Final Tax Liability Tax Reg. No.
Income Tax 0
Local income Tax 0
Total 0
Tax
Prepaid Tax
Previous Job
0 0
0 0
0 0
We acknowledge the withholding (or payment) of above taxes (or payroll income). February, 2011 Taxes withheld by (Signature or seal) To Head of O O District Tax Office 210297
62
(Page 2) Gross Wage & Salary( Or - -3) Deduction for Wage & Salary Income Adjusted Wage & Salary Income Employee Basic Spouse Dedu ction Dependents (No. of dependents: 3) The Aged (No. of the aged: 1) The Handicapped (No. of the handicapped: Addit Women ional Dedu Children under 6Yrs ction (No. of children: 1) -1 Newly Born / Newly Adopted (No. of newly born/adopted:) 50,000,000 13,000,000 37,000,000 1,500,000 1,500,000 Personal Pension Savings Deduction Pension Savings Deduction -1 Deductions for Contribution of Small-sized Company and Self-employed Mutual aid association Saving for subscription Housing Total subscription saving -2Deductions Long-term home purchasing for housing saving fund Worker's home purchasing Other savings Deduc tion by Investment Association Deduction Special Taxati Credit Card Usage Deduction on Employee Stock Ownership Deduction Long-term stock-invested savings deduction -1 S/M enterprises which maintain employment For Households with Multiple Children For National Pension Contribution Government employee's pension Pens ion Cont ribut Dedu ion c Dedu tion ction - 1 O t h e r Soldier's pension Pension Contrib Private school employee's pension ution Special post office pension Deduction for scientists and Retirem engineers e n t Guarantee of Workers' Retirement Pension Benefits Health insurance Employment insurance Insuran ce Indemnity insurance Insurance for disabled Medical Expenses Education Expenses Speci al Dedu ction Housin Monthly rent g Fund Principal and interest payment of home rental loans Total Exemptions Tax Credit for wage & salary income Taxpayer Assn. Credit 3,705,000 1,000,000 Tax Exemp tion Income Tax Act Restriction of Special Taxation Act 3,705,000 Sub-Total Taxable Income (Tax Base) 100,000 31,900,000 1,000,000
100,000
Items
Calculated Income Tax
3,705,,000
Interest payments of loans for long-term housing mortgage Donation
Home Mortgage Interests Tax Credit Political Fund Donation Foreign Tax Credit
Sub-Total
1,000,000
Sub-Total
Standard Deduction Income after Deduction 32,000,000
Final Tax Liability(--)
63
(Page 3)
Personal Deduction List (As for Personal Deduction, put in relevant items, and as for each item under Special Deduction, write down the amount of money you actually spent.)
Relation ship Code Name Personal Deduction Special Deduction
Basic Citizen/ Resident(Alien) Reg. No. Foreigner Women No. of people eligible for personal deduction (No. of multiple children: ) 0 9 3 9 Scott W. Doner (Myself) Mrs. Doner 740102-6234001
Aged
Insurance Credit Cards etc. Usage Deduction Newly under Description Premium Born/ Handic 6 (Health Insurance Medical Expenses Education Expenses Credit Card & Debit card, Newly apped years Cash Receipt Premium Check Card etc, etc. Adopted old included) NTS Data Other Data NTS Data Other Data NTS Data Other Data NTS Data Other Data NTS Data Other Data NTS Data Other Data 1,000,000 13,000,000 1,000,000 13,000,000
Donation
Instruction
This form is used when a tax association specified in the Article 149(1) of the Income Tax Act conduct the year-end tax settlement for the earned income which falls into the category specified in the Article 127-1(4) of the Income Tax Act. Enter the company name and the registration number of which your actual working place for Company Name Tax Reg. No. If the business is not registered, enter the business registration number of the tax association. 1. The State of residence and code for state of residence field is only required for non-residents. The abbreviated name of country or the state code should be entered according to the International Organization for Standardization (ISO) code designated by the ISO. ( Checking the ISO country code : NTS websiteResources Additional Info. ISO coutnry code). ex) Republic of Korea : KR, United States: US 2. For the nationality, check "Foreigner 9" if the wage/salary income earner is a foreigner and write the nationality code specified by the ISO country code. If applicable for flat tax rate, select "Yes 1" with submission of an Application of the flat tax rate. 3. Withholding agents must submit payment records by March 10 of the following year (or, by the end of the month which is two months after the suspension/closing of business) which includes the day of issuance. 4. .In the box, Details of Income by Company, enter the income amount not including non-taxable income. . The non-taxable income should be entered separately in the box by code (If there are too many non-taxable items, enter the total amount only in the the box , Non-taxable Income, and -1, Total reduction from income. III. Use another paper for details of non-taxable income. 5. When conducting the year-end tax settlement for the wage and salary income and other earned income specified in the Article 127-1(4) of the Income Tax Act, Enter data on taxpayer association in the -1 Taxpayer association section, and enter wage and salary income which falls into the Article 127-1(4) of the Income Tax Act. Enter the taxpayer association credit specified in the Article 150 of the Income Tax Act in the Taxpayer credit section. 6. Gross Wage & Salary: Enter the amount of Total. If the foreign worker wants application of a flat tax rate under the provision of RSTA12-2(3), he/she shall enter the sum of Total and non-taxable income amount. In this case, the regulation of non-taxation, deduction, exemption or tax credit related to the income tax are not applicable. 7. Fill in the global income special deduction ( ) section and other income deduction sections ( ) with the deduction amount from the Report of Exemption & Deduction from Income/ Report of Exemption & Deduction from Wage & Salary Income [Tax Form 37] 8. Enter numbers after removing digits below the decimal point, and In line , enter 0 when taxes due are not exceed 1,000. 9. Fill out "Personal Deduction List" referring to the followings a. Relationship Code Category Income earner himself/herself (ITA 50 1) Spouse (ITA 50 2) Sibling (ITA 50 ) Relationsh ip code 0 3 6 Category Income earner's linear ascendant (ITA 50 3 ) Linear descendant(ChildAdopted) (ITA 50 3 ) Pension receiver(Except code1~6) (ITA 50 3 ) Relationshi p code 1 4
*
Category Spouse' linear ascendant (ITA 50 3 ) Linear descendant (Except code 4 ) (ITA 50 3 ) Fostered child (ITA 50 3 )
Relationshi p code 2 5* 8
64
Case #5. Foreign engineers receiving wage & salary income eligible for tax exemption and start to work from 2010
< Information >
Allen working for ABC Co. had Wage & Salary Income during 2010 as follows : He earned 500,000,000 which is eligible for tax exemption. Allen has no non-taxable income. His family members are as follows: Allen (age 40), Amy (Allen's wife, age 38) (His wife is qualified dependent with gross income of 1,000,000 or less for the tax year) He paid 5,000,000 for national health insurance premium, 7,300,000 for national pension contribution. Allen started working for ABC Co. since 2010. The amount withheld monthly by his withholding agent is as follows: Based on the Simplified Tax Withholding Table(2010), the amount withheld matching his situation is 3,700,000 every month.(Local income tax is not included.) Credit card usage of160,000,000

Global Taxation Method with Basic Tax Rate Total Income Non-taxable income Gross Wage & Salary Income Deduction for his Wage & Salary Income A djusted Wage & Salary Income Personal Deduction Basic Deduction Pension Contribution Deduction Special Deduction national health insurance premium Other Deduction Credit Card Usage Deduction Taxable Income Calculated Income Tax (35%) Tax Exemption for foreign engineer Tax Credit for Wage & Salary Income Final Tax Liability Prepaid Tax Tax D ue 500,000,000 0 500,000,000 35,500,000 464,500,000 3,000,000 7,300,000 5,000,000 3,000,000 *1) 446,200,000 141,270,000 70,635,000 *2) 500,000 70,135,000 44,400,000 25,735,000 (21,500,000)
(3,700,00012)
*1) (160,000,000-500,000,00025%)20%(Limit 3,000,000) *2) 141,270,000 50%
Separate Taxation Method with 15% Flat Rate

Final Tax Liability = 500,000,000 15% = 75,000,000 Tax Due = 75,000,000 - 44,400,000 = 30,600,000
65
Global Taxation Method with Basic Tax Rate

[Tax Form 24(1)] <Revised on August 6. 2010> Residency Cn ou try (Page 1) Resident 1./Non-Resident 2 Country Code
Control No.
Nationality Citizen 1/Foreigner 9 Application of Flat tax rate Yes 1 / No 2 Nationality Nationality Code Householder 1, Household Member 2 Under employment 1, Year-end Tax Settlement Retired 2 P. Paul 5 6 0 4 0 5 - 9 3 4 2 3 4 4 7 1 0 1 0 1 -1Taxpayer Association - 5 2 3 4 5 6 7
ABC Co. Representative Name 1 2 3 - 8 1 - 1 2 3 4 5 Resident(Alien) Reg. No. 101-1 Jongro-1ga, Jongro-gu, Seoul Allen Miller Resident(Alien) Reg. No. 200 Jongro-1ga, Jongro-gu, Seoul Current Job ABC Co. 123-81-12345 500,000,000 Previous Job Previous Job
Total
Company Name Tax Reg. No. Details Length of Service Attributable Period of Tax Exemption of Gross Payroll Income Gross Bonus by Deemed Bonus
500,000,000
-1 Stock Option Execution Profit Compa ny -2 Employee Stock Ownership Assoc. Drawings -3 -4 Total M01 O01 Q01 X01 500,000,000 500,000,000
Overseas Allowances -1 Night time Allowances -2 Childbirth and Child Care Allowances Non-tax able Income -20 Designated tax exemption Total -1 Total reduction from income -3 Exemption for Foreign employee -4 -5 ~
Income Tax 70,135,000
Local income Tax Special Tax for Agriculture 7,013,500
Total 77,148,500
Tax
Prepaid Tax
Previous Job
44,400,000 25,735,000
4,440,000 2,573,500
48,840,000 28,308,500
We acknowledge the withholding (or payment) of above taxes (or payroll income). February, 2011 Taxes withheld by (Signature or seal) To Head of O O District Tax Office
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(Page 2) Gross Wage & Salary( Or - -3) Deduction for Wage & Salary Income Adjusted Wage & Salary Income Employee Basic Spouse Dedu ction Dependents (No. of dependents: 3) The Aged (No. of the aged: 1) The Handicapped (No. of the handicapped: Additi Women onal Dedu Children under 6Yrs ction (No. of children: 1) -1 Newly Born / Newly Adopted (No. of newly born/adopted:) 500,000,000 35,500,000 464,500,000 1,500,000 1,500,000 Personal Pension Savings Deduction Pension Savings Deduction -1 Deductions for Contribution of Small-sized Company and Self-employed Mutual aid association Saving for subscription Housing Total subscription saving -2Deductions Long-term home purchasing for housing saving fund Worker's home purchasing savings Other Deduction by Special Investment Association Deduction Taxation Credit Card Usage Deduction Employee Stock Ownership Deduction Long-term stock-invested savings deduction -1 S/M enterprises which maintain employment For Households with Multiple Children For National Pension Contribution Government employee's pension - 1 P e n s i O t h e r Soldier's pension P e n s io n on Items Contri Contribu Private school employee's pension bution tion Deduc D e d u Special post office pension tion ction Deduction for scientists and engineers Retirement Pension Guarantee of Workers' Retirement Benefits Health insurance Insurance Employment insurance Indemnity insurance Insurance for disabled Medical Expenses Education Expenses Speci al Dedu ction H ousing M onthly rent Fund Interest payments of loans for long-term housing mortgage Donation Principal and interest payment of home rental loans Total Exemptions Tax Credit for wage & salary income Taxpayer Assn. Credit 70,635,000 500,000 5,000,000 Tax Exemptio n Sub-Total Taxable Income (Tax Base) Calculated Income Tax Income Tax Act Restriction of Special Taxation Act 70,635,000 3,000,000 446,200,000 141,270,000 7,300,000
3,000,000
Sub-Total
12,300,000
Sub-Total 500,000 70,135,000
Standard Deduction Income after Deduction 449,200,000
Final Tax Liability(--)
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(Page 3)
Description Newly Credit Cards etc. Usage Deduction Basic under Insurance Premium Citizen/ Resident(Alien) Reg. No. Born/ Aged Newly Handic 6 years (Health Insurance Medical Expenses Education Expenses Credit Card & Debit card, Foreigner apped Cash Receipt Women old Premium included) Check Card etc, etc. Adopted No. of people eligible for personal deduction (No. of multiple children: ) 0 9 3 9 Allen Miller (Myself) Mrs. Miller 730102-6234001 NTS Data Other Data NTS Data Other Data NTS Data Other Data NTS Data Other Data NTS Data Other Data NTS Data Other Data 5,000,000 160,000,000 5,000,000 160,000,000
Donation
Instruction
This form is used when a tax association specified in the Article 149(1) of the Income Tax Act conduct the year-end tax settlement for the earned income which falls into the category specified in the Article 127-1(4) of the Income Tax Act. Enter the company name and the registration number of which your actual working place for Company Name Tax Reg. No. If the business is not registered, enter the business registration number of the tax association. 1. The State of residence and code for state of residence field is only required for non-residents. The abbreviated name of country or the state code should be entered according to the International Organization for Standardization (ISO) code designated by the ISO. ( Checking the ISO country code : NTS websiteResources Additional Info. ISO coutnry code). ex) Republic of Korea : KR, United States: US 2. For the nationality, check "Foreigner 9" if the wage/salary income earner is a foreigner and write the nationality code specified by the ISO country code. If applicable for flat tax rate, select "Yes 1" with submission of an Application of the flat tax rate. 3. Withholding agents must submit payment records by March 10 of the following year (or, by the end of the month which is two months after the suspension/closing of business) which includes the day of issuance. 4. .In the box, Details of Income by Company, enter the income amount not including non-taxable income. . The non-taxable income should be entered separately in the box by code (If there are too many non-taxable items, enter the total amount only in the the box , Non-taxable Income, and -1, Total reduction from income. III. Use another paper for details of non-taxable income. 5. When conducting the year-end tax settlement for the wage and salary income and other earned income specified in the Article 127-1(4) of the Income Tax Act, Enter data on taxpayer association in the -1 Taxpayer association section, and enter wage and salary income which falls into the Article 127-1(4) of the Income Tax Act. Enter the taxpayer association credit specified in the Article 150 of the Income Tax Act in the Taxpayer credit section. 6. Gross Wage & Salary: Enter the amount of Total. If the foreign worker wants application of a flat tax rate under the provision of RSTA12-2(3), he/she shall enter the sum of Total and non-taxable income amount. In this case, the regulation of non-taxation, deduction, exemption or tax credit related to the income tax are not applicable. 7. Fill in the global income special deduction ( ) section and other income deduction sections ( ) with the deduction amount from the Report of Exemption & Deduction from Income/ Report of Exemption & Deduction from Wage & Salary Income [Tax Form 37] 8. Enter numbers after removing digits below the decimal point, and In line , enter 0 when taxes due are not exceed 1,000. 9. Fill out "Personal Deduction List" referring to the followings a. Relationship Code Category Income earner himself/herself (ITA 50 1) Spouse (ITA 50 2) Sibling (ITA 50 ) Relationsh ip code 0 3 6 Category Income earner's linear ascendant (ITA 50 3 ) Linear descendant(ChildAdopted) (ITA 50 3 ) Pension receiver(Except code1~6) (ITA 50 3 ) Relationshi p code 1 4
*
Category Spouse' linear ascendant (ITA 50 3 ) Linear descendant (Except code 4 ) (ITA 50 3 ) Fostered child (ITA 50 3 )
Relationshi p code 2 5* 8
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Separate Taxation Method with 15% Flat Rate

[Tax Form 24(1)] <Revised on August 6. 2010> Residency Cn ou try (Page 1) Resident 1./Non-Resident 2 Country Code
Control No.
Nationality Citizen 1/Foreigner 9 Application of Flat tax rate Yes 1 / No 2 Nationality Nationality Code Householder 1, Household Member 2 Under employment 1, Year-end Tax Settlement Retired 2 P. Paul 5 6 0 4 0 5 - 9 3 4 2 3 4 4 7 1 0 1 0 1 -1Taxpayer Association - 5 2 3 4 5 6 7
ABC Co. Representative Name 1 2 3 - 8 1 - 1 2 3 4 5 Resident(Alien) Reg. No. 101-1 Jongro-1ga, Jongro-gu, Seoul Allen Miller Resident(Alien) Reg. No. 200 Jongro-1ga, Jongro-gu, Seoul Current Job ABC Co. 123-81-12345 500,000,000 Previous Job Previous Job
Total
Company Name Tax Reg. No. Details Length of Service Attributable Period of Tax Exemption of Gross Payroll Income Gross Bonus by Deemed Bonus
500,000,000
-1 Stock Option Execution Profit Compa ny -2 Employee Stock Ownership Assoc. Drawings -3 -4 Total M01 O01 Q01 X01 500,000,000 500,000,000
Overseas Allowances -1 Night time Allowances -2 Childbirth and Child Care Allowances -3 Exemption for Foreign employee Non-tax -4 able -5 Income ~ Designated tax exemption Total -1 Total reduction from income
Income Tax 75,000,000
Local income Tax Special Tax for Agriculture 7,500,000
Total 82,500,000
Tax
Prepaid Tax
Previous Job
44,400,000 -30,600,000
4,440,000 -3,060,000
48,840,000 -33,660,000
We acknowledge the withholding (or payment) of above taxes (or payroll income). February, 2011 Taxes withheld by (Signature or seal) To Head of O O District Tax Office
69
(Page 2) Gross Wage & Salary( Or - -3) Deduction for Wage & Salary Income Adjusted Wage & Salary Income Employee Basic Spouse Dedu ction Dependents (No. of dependents: 3) The Aged (No. of the aged: 1) The Handicapped (No. of the handicapped: Additi Women onal Dedu Children under 6Yrs ction (No. of children: 1) -1 Newly Born / Newly Adopted (No. of newly born/adopted:) 500,000,000 Personal Pension Savings Deduction Pension Savings Deduction -1 Deductions for Contribution of Small-sized Company and Self-employed Mutual aid association Saving for subscription Housing Total subscription saving -2Deductions Long-term home purchasing for housing saving fund Worker's home purchasing savings Other Deduction by Special Investment Association Deduction Taxation Credit Card Usage Deduction Employee Stock Ownership Deduction Long-term stock-invested savings deduction -1 S/M enterprises which maintain employment For Households with Multiple Children For National Pension Contribution Government employee's pension - 1 P e n s i O t h e r Soldier's pension P e n s io n on Items Contri Contribu Private school employee's pension bution tion Deduc D e d u Special post office pension tion ction Deduction for scientists and engineers Retirement Pension Guarantee of Workers' Retirement Benefits Health insurance Insurance Employment insurance Indemnity insurance Insurance for disabled Medical Expenses Education Expenses Speci al Dedu ction H ousing M onthly rent Fund Interest payments of loans for long-term housing mortgage Donation Principal and interest payment of home rental loans Total Exemptions Tax Credit for wage & salary income Taxpayer Assn. Credit Sub-Total Taxable Income (Tax Base) Calculated Income Tax Income Tax Act Restriction of Special Taxation Act Tax Exemption 500,000,000 75,000,000
Sub-Total
Sub-Total Final Tax Liability(--) 75,000,000
Standard Deduction Income after Deduction

Examples of Actual Q&A on NTS website
73
Tax Liabilities of Wage & Salary Workers
A. Question My income taxes are withheld from my monthly pay. Does this settle and finalize my Korean income tax liabilities? B. Answer At each month that you are paid, your employer must withhold and pay income taxes at an amount as shown on the Simplified Tax Withholding Table at the district tax office. Your Korean income tax liabilities are settled and finalized by your employer through the year-end tax settlement, which must be completed by the time you receive your February monthly pay (or in the month that you receive your final payment). When a greater amount was withheld than what you owe (which is your final tax liability), your employer (withholding agent) must refund the difference to you. Conversely, if it turns out that a lesser amount had been withheld, then additional withholding will be made to cover the difference. Once the year-end tax settlement is completed, make sure to obtain a Receipt for Wage and Salary Income Tax Withholding from your employer as it establishes your receipt of income and payment of taxes.
2 Calculating Taxes on Income from Employment

A. Question I am a foreign worker. How do I calculate my income taxes on wages and salaries? B. Answer Wage and salary income is taxed the same way for both residents and non- residents, the only difference being in the availability of certain deductions and credits. Tax calculation starts by figuring your total income from employment, which is the sum of your gross earnings and non-taxable income for a given tax year. First, subtract non-taxable income from your total income from employment to derive your
74
gross earnings. Then, subtract the amount available for deduction for wage and salary income, to derive the adjusted wage and salary income. (For more information on deduction for wage and salary income, refer to Flowchart of Year-end Tax Settlement for Wage & Salary Income in page 2.) Your tax base (or taxable income) is your adjusted wage and salary income less personal deductions, pension contribution deduction, special deductions, and other deductions. Please note that if you are a non-resident worker, only the following deductions will be available to you: 1) Basic and additional deductions for the non-resident taxpayer him/herself, under personal deductions 2) Pension contribution deduction Then take your tax base and multiply it by the applicable tax rate to compute your calculated income tax. From there, take off the amount allowable for wage and salary income tax credit and the amount of the personal income tax that has been withheld from you. The remaining amount is the taxes payable. There is also a special tax incentive for foreign workers on their wages and salaries receivable by December 31, 2012. As a foreign worker(excluding daily workers*), you may select "Separate taxation method with 15% flat tax rate" at the time of whichever of year-end tax settlement or global tax reporting is applicable to you. In this case, tax exemption, deduction and tax credit will not be allowed.
* A daily worker is a person satisfying both requirements below:
Any person who receives payment based upon the days or time during which his
labor is provided, or by calculating the pay based upon the performance from labor in the days or time during which his labor is provided;
A person who does not remain under the continued employment by the same
employer for 3 months or more under an employment contract (exceptions apply to persons engaged in construction work and in stevedoring)
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3 Question on taxes deducted from salary by employer

A. Question I am currently teaching as an English teacher in Korea. I am earning 2,000,000 per month, and am being taxed at a rate of 7% per month, 140,000 is deducted from my pay each month. I have been informed that this amount is incorrect, and I should only be getting 3.5% deducted per month. Can you tell me if this information is correct? If I suspect that my Employer has not registered me with the NTS, and are not paying my taxes at all, is there any way I can find out. I do not wish to work for a dishonest employer. I have tried requesting a copy of my tax certificate from my Employers, but this has been denied. Your advice and answers would be appreciated. B. Answer As far as individual income tax is concerned, when you have earned monthly Salary & Wage income of 2,000,000, the income tax amount to be withheld from your wage is 22,540 monthly according to the Simplified Tax Withholding Table for 2010 (assuming the number of your family is one, just yourself, which means you have no qualified spouse or dependents who live together with you in Korea). However, to take into account the contribution amount under the National Pension Scheme, the amount to be deducted from your monthly income may increase. Although, National Tax Service is not in charge of the National Pension Scheme, We would like to outline the system briefly for your convenience. Generally speaking, foreigners working at the workplace with more than 1 full-time employee are included in the mandatory coverage of the Scheme, with some exceptions (For further information, contact National Pension Corporation(http://www.nps.or.kr) to the number 1355 without dialing code). The contribution of workplace-based insured persons is equally shared between the employer and the employee. The contribution rate for the insured person is 9%, which is normally calculated by multiplying the insured person's Standard Monthly Income shown on the National Pension Contribution Table, which has a similar function to Simplified Tax Withholding Table for income tax withheld, by contribution rate.
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In the case of monthly income of 2,000,000, the portion of contribution an employee should assume, which is to be deducted from his/her wage, is 90,000. To sum up, in your case, the amount deducted from your monthly salary will be at least 112,540(Income Tax withheld + National Pension Contribution). Moreover, a bit of residence tax and medical insurance fee may be added. 90,000 = 2,000,000 9% 2 To add one thing, your employer should accept your request to present a copy of your tax certificate(Receipt for Wage & Salary Income Tax Withholding). When you retire from your current job before the end of this year, your employer would have responsibility to have your tax status settled for you at the time of your retirement. So, you could get tax refunded or pay more tax then from(to) your employer.
4 Question on tax return of a taxpayer who has income(s) other than earned income.
A. Question I have been an employee in a company and earned salary income since August this year, and, happened to earn some performance fee from a TV broadcasting company. In this case, do I have to file the final tax return next year in addition to the year-end tax settlement of the end of this year? B. Answer You may be treated as a resident (taxpayer) when you have an occupation which requires you to reside in Korea one year or more. Then, you are supposed to file an income tax return for your worldwide income including your Korean source income. Therefore, when you do not have any foreign-source income, you only have to file a return on your Korean source income. If you had Wage and Salary Income only, your income tax liability would be settled through the year-end settlement. However, in your case, as you had an occasional income (Other Income) from a television broadcasting company (80% of the amount will be deducted as necessary expenses when calculating taxable income) as well as Wage & Salary Income, you are subject to file income tax return for the two kinds of income by the end of May next year to the district tax office concerned.
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5 Simplified Year-end Tax Settlement

A. Question I need to obtain a record of my 2010 expenditures for year-end tax settlement deduction purposes. Is there an easy way to get this? B. Answer Yes, there is a simple way of obtaining that information. Simplified Year-end Tax Settlement (www.yesone.go.kr) is your one-stop channel for collecting the receipts you need for claiming your income deduction. Simplified Year-end Tax Settlement is an internet-based service that shows the allowable amount of deduction that you can take for yourself and your dependents. A print-out of the screen displaying such records is used as a valid supporting document that you can submit to your withholding agent. You would need to register your dependents at the website first in order to view their deductibility records (such as their medical and insurance fees). Simplified Year-end Tax Settlement will save you the time and trouble of going to each issuer of receipts (such as banks and hospitals) to obtain the necessary documents. Simplified Year-end Tax Settlement is available in the Korean language only.
6 Difference in tax treatment between resident and non-resident

A. Question I've been here in Korea just for three months working at a company incorporated in Korea. Recently the company requested me to hand in an application of tax allowances for year-end tax settlement. My question is whether there is any kind of discrimination against foreign labor-income earners. B. Answer A person is for the tax purpose either a resident or a non-resident of Korea depending on his
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status on residence or domicile. Thus, you have to identify whether you are to be treated as resident or non-resident (Having a job which substantially needs more than 1 year of stay in Korea, you may meet the criterion for resident even if you have resided in Korea less than 1 year). A resident is liable to income tax on items of income derived from sources both within and outside Korea. On the other hand, a non-resident is liable to income tax only on items of income derived from sources within Korea. Under the income tax law, income earned by both residents and non-residents is subject to global and separate taxation. Under global taxation, Business income, Wage & Salary income, Pension income and Miscellaneous income attributed to a resident are aggregated and taxed progressively. Interest and dividends are subject to tax withholding. Non-residents are similarly taxed on Wage & Salary income from Korean sources. The tax rates on individual income range from 6% to 35%. Although most of the provisions concerning the tax base and tax amount of residents shall apply to a non-resident who has earned Wage and Salary income in Korea, the non-resident taxpayer is not entitled to basic deduction(except for oneself), additional deduction(except for oneself) and special deduction.
Other Frequently Asked Questions
What kind of taxes are there in Korea? Taxes in Korea comprise national and local taxes. National taxes are divided into internal taxes, customs duties and three earmarked taxes; the local taxes include province taxes and city & county taxes as shown below. The national internal taxes consist of direct and indirect taxes, and each consists of six and six taxes respectively. Of these twelve taxes, Income Tax, Corporation Tax, and Value Added Tax make up the bulk of the Korean tax revenue. There also exist two national earmarked taxes, Education Tax, and Special Tax for Rural Development; the revenues from these sources go directly to pre-designated government programs. There are sixteen local taxes, and they are divided into province and city & county taxes. At the province level, there are four ordinary taxes and three earmarked taxes. At the city & county level, there are seven ordinary taxes and two earmarked taxes. In the six large specially designated cities that are run as autonomous local administrative units, the tax composition is slightly different from that of the provinces and cities or counties, although the residents are required to pay the same taxes.
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What is the concept and functions of Taxpayer Associations for wage and salary income earners? Taxpayers who are paid wage and salary income from a non-resident living in a foreign country, a foreign corporation (Except domestic branches or domestic places of business), a foreign organization or the UN forces stationed in Korea (Except US army) may organize taxpayer associations through which they may pay taxes. A taxpayer association shall collect income tax from the members each month. And income tax for each month collected by a taxpayer association will be paid to the government by the 10th day of the following month. Tax credit for payment of tax by taxpayer association is 10%. Would you explain withholding tax settlement for Wage and salary income in brief? If wage or salary is paid monthly, the tax amount to be withheld is calculated by the "Simplified Tax Table" attached at the end of the Income Tax Law. Then a person subject to tax withholding must calculate the total annual tax amount in February of the following year or at the time of the last payment of income in the year (e.g., when the income earner completes employment during the year) and collect or refund the difference between the tax paid and the tax due. This amount is calculated by applying the basic tax rates and the tax amount withheld, already through the Simplified Tax Withholding Table What are penalty taxes to my employer on failures to withhold tax and on failures to report withholding invoices? If a person subject to tax withholding fails to withhold tax at source or fails to pay the government tax withheld within the payment period, a penalty tax shall be charged. On the other hand, if a concerned person fails to submit a payment report within the reporting period or if the reported facts concerning payment are found to be unclear as specified by the Presidential Decree, a penalty in the amount of 2% of the payment due shall be charged. Is there a way we can get a refund for last year's income tax? The tax amount taken off from your wage is treated as a credit against the overall amount of tax payable by you for the tax year in question. In February of the following year or at the time of the last payment of income in the year, your tax liability is settled and finalized through exact calculation by applying the related tax rates. And then, the balance between the sum of the amount of tax withheld monthly and final tax due to be paid is collected or refunded to you, which means you have to check your tax settlement with your employer.
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I retired from work during the attributable taxation period and claimed for a refund through year-end tax settlement. However, my company keeps delaying the payment of the refund. Can I get the refund from a district tax office instead of through the company? - The refund occurred as a result of the year-end tax settlement for wage and salary income workers is to be paid by the withholding agent you have worked for. <The process of refund payment of the year-end tax settlement> (Adjustment/refund) or District tax (Claim for a refund) office (Refund) Wage & salary income workers
Withholding (Additional payment) agent (Refund)
- If a refund occurs as a result of the year-end tax settlement and the withholding agent keeps delaying the payment of the refund, then the worker has the right to claim for a refund from the withholding agent. That is, the worker can claim for the refund in the same way as claiming overdue wage. Regarding wage and salary, retirement pay, and dismissal, you can contact worker's call center at the Ministry of Labor (1350). How to calculate the withholding tax amount on the wage of daily workers? A daily worker's tax obligations are completed at the time his/her wage is paid by the employer, as personal income tax is withheld at the source by the employer (withholding agent) before the day's wage is paid out. Calculating a daily's worker's withholding tax Calculated tax amount = [(Daily wage - non-taxable income) - earned income deduction (100,000 KRW per day)] x 8% tax rate Withholding tax = Calculated tax amount - (calculated tax amount x earned income tax credit of 55%) e.g.) Withholding tax amount for a person earning 130,000 KRW per day is 1,080 KRW Calculated tax amount : 2,400 KRW = (130,000 -100,000) x 8% Withholding tax amount : 1,080 KRW = 2,400 KRW - (2,400 KRW x 55%)
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A withholding tax amount of less than 1,000 KRW is not subject to withholding pursuant to the "Regulations on the Collection of Small-Amount Taxes." However, when the worker's daily wage is paid out in a lump sum at the end of a specified period, a withholding tax applies when the combined amount of withholding tax on that lump sum exceeds 1,000 KRW, even if the withholding tax amount is less than 1,000 KRW when calculated on a daily basis. Can a daily worker make Year-end Tax Settlements? No. A daily worker's wage is paid by the withholding agent (employer) after the withholding agent withholds applicable withholding tax from the wage, and therefore the daily worker's tax obligations are complete at the time the daily worker receives his/her wage. This is different from a full-time wage and salary worker, whose tax obligations are completed through the Year-End Tax Settlement. However, if a daily worker is employed by the same employer for a period of three months or longer (or 1 year or longer in the construction industry), that daily worker is deemed a full-time wage and salary worker commencing from the month in which the last day of the full three months falls. As such, the employer must withhold taxes from the worker's wage following the Simplified Tax Rate Table, and the daily worker must make Year-End Tax Settlements for the period between January 1 and December 31 (or between January 1 and the date of retirement if the worker leaves the company during the current year).
Helpline for Foreigners

1588-0560

Tax Forms
Tax Forms
85
[Tax Form 24(1)] <Revised on August 6. 2010>
(Page 1) Residency Resident 1./Non-Resident 2 Country Country Code Nationality Citizen 1/Foreigner 9 Application of Flat tax rate Yes 1 / No 2 Nationality Nationality Code Householder 1, H ousehold M em ber2 Y ear-end Tax Under employment 1, Settlem ent Retired 2 P.Paul -1Taxpayer Association
Control No.
Receipt for Wage & Salary Income Tax Withholding Statement on Wage & Salary Income Payment ( For Employee For Employer For issuer to summit to tax office)
Company Name Tax Reg. No. Address Employee Name (Taxpayer) Address Employer Description Company Name Tax Reg. No. Length of Service Attributable Details Period of Tax Exemption of Income Gross Bonus Deemed Bonus by -1 Stock Option Execution Profit Company -2 Employee Stock Ownership Assoc. Drawings -3 -4 Total M01 O01 Q01 X01 Gross Payroll
Representative Name Resident(Alien) Reg. No. Resident(Alien) Reg. No.
Current Job
Previous Job
Previous Job
Total
Overseas Allowances -1 Night time Allowances -2 Childbirth and Child Care Allowances -3 Exemption for Foreign employee Non-taxable Income -4 -5 ~ -20 Designated tax exemption Total -1 Total reduction from income
Income Tax
Inhabitant Tax
Total
Tax
Prepaid Tax
Previous Job
Current Job Taxes Due We acknowledge the withholding (or payment) of above taxes (or payroll income). August Taxes withheld by To Head of O O D istrict Tax Office 210297 (Signature or seal) , 2010
86
(Page 2) Gross Wage & Salary( Or - -3) Deduction for Wage & Salary Income Adjusted Wage & Salary Income Employee Basic Spouse Dedu ction Dependents (No. of dependents: The Aged (No. of the aged: Personal Pension Savings Deduction Pension Savings Deduction -1 Deductions for Contribution of Small-sized Company and Self-employed Mutual aid association Saving for subscription Housing Total subscription saving -2Deductions for housing Long-term home purchasing saving fund ) Worker's home purchasing savings Other Deduc tion Investment Association Deduction by Special Taxa Credit Card Usage Deduction tion Employee Stock Ownership Deduction
The Handicapped (No. of the handicapped: Additi onal Dedu ction Women Children (No. of children: )
-1 Newly Born / Newly Adopted (No. of newly born/adopted:
Long-term stock-invested savings deduction -1 S/M enterprises which maintain employment
For Households with Multiple Children For National Pension Contribution Government employee's pension Soldier's pension P e n s i -1 Other Deduc on Pension tion Contri Contribution Private school employee's pension bution D edu ction Special post office pension Deduction for scientists and engineers R e tire m e n t Pension Guarantee of Workers' Retirement Benefits Health insurance Insurance Employment insurance Indemnity insurance Insurance for disabled Medical Expenses Education Expenses Speci al Dedu H o u s i n g M onthly rent Fund ction Principal and interest payment of home rental loans Total Exemptions Tax Credit for wage & salary income Taxpayer Assn. Credit Tax Exem ption Sub-Total Taxable Income (Tax Base) Calculated Income Tax Income Tax Act Restriction of Special Taxation Ac t
Items
Interest payments of loans for long-term housing mortgage Donation
Tax Credit
Home Mortgage Interests Political Fund Donation Foreign Tax Credit
Sub-Total
Sub-Total Final Tax Liability(--)
Standard Deduction Income after Deduction
Tax Forms
87
(Page 3)
Basic Citizen/ Resident(Alien) Reg. No. Foreigner Women No. of people eligible for personal deduction (No. of multiple children: ) 0 (Myself)
Aged
Insurance Credit Cards etc. Usage Deduction Newly Handi under Description Premium Born/ years (Health Insurance Medical Expenses Education Expenses Credit Card & Debit card, Newly cappe 6 old Cash Receipt Premium Check Card etc, etc. Adopted d included) NTS Data Other Data NTS Data Other Data NTS Data
Donation
Other Data NTS Data
Other Data NTS Data
Other Data
Instruction
This form is used when a tax association specified in the Article 149(1) of the Income Tax Act conduct the year-end tax settlement for the earned income which falls into the category specified in the Article 127-1(4) of the Income Tax Act. Enter the company name and the registration number of which your actual working place for Company Name Tax Reg. No. If the business is not registered, enter the business registration number of the tax association. 1. The State of residence and code for state of residence field is only required for non-residents. The abbreviated name of country or the state code should be entered according to the International Organization for Standardization (ISO) code designated by the ISO. ( Checking the ISO country code : NTS websiteResources Additional Info. ISO coutnry code). ex) Republic of Korea : KR, United States: US 2. For the nationality, check "Foreigner 9" if the wage/salary income earner is a foreigner and write the nationality code specified by the ISO country code. If applicable for flat tax rate, select "Yes 1" with submission of an Application of the flat tax rate. 3. Withholding agents must submit payment records by March 10 of the following year (or, by the end of the month which is two months after the suspension/closing of business) which includes the day of issuance. 4. .In the box, Details of Income by Company, enter the income amount not including non-taxable income. . The non-taxable income should be entered separately in the box by code (If there are too many non-taxable items, enter the total amount only in the the box , Non-taxable Income, and -1, Total reduction from income. III. Use another paper for details of non-taxable income. 5. When conducting the year-end tax settlement for the wage and salary income and other earned income specified in the Article 127-1(4) of the Income Tax Act, Enter data on taxpayer association in the -1 Taxpayer association section, and enter wage and salary income which falls into the Article 127-1(4) of the Income Tax Act. Enter the taxpayer association credit specified in the Article 150 of the Income Tax Act in the Taxpayer credit section. 6. Gross Wage & Salary: Enter the amount of Total. If the foreign worker wants application of a flat tax rate under the provision of RSTA12-2(3), he/she shall enter the sum of Total and non-taxable income amount. In this case, the regulation of non-taxation, deduction, exemption or tax credit related to the income tax are not applicable. 7. Fill in the global income special deduction ( ) section and other income deduction sections ( ) with the deduction amount from the Report of Exemption & Deduction from Income/ Report of Exemption & Deduction from Wage & Salary Income [Tax Form 37] 8. Enter numbers after removing digits below the decimal point, and In line , enter 0 when taxes due are not exceed 1,000. 9. Fill out "Personal Deduction List" referring to the followings a. Relationship Code Category Income earner himself/herself (ITA 50 1) Spouse (ITA 50 2) Sibling (ITA 50 ) Relationsh ip code 0 3 6 Category Income earner's linear ascendant (ITA 50 3 ) Linear descendant(ChildAdopted) (ITA 50 3 ) Pension receiver(Except code1~6) (ITA 50 3 ) Relationshi p code 1 4* 7 Category Spouse' linear ascendant (ITA 50 3 ) Linear descendant (Except code 4 ) (ITA 50 3 ) Fostered child (ITA 50 3 ) Relationshi p code 2 5* 8
88
(Page 4)
N on-taxable Wage & Salary Income A nd Code

Category Text of Provisions & Clauses ITA 12 3 ITA12 3 ITA12 3 ITA12 3 ITA12 3 ITA12 3 ITA12 3 ITA12 3 Code A01 B01 C01 D01 E01 E02 E10 F01 G01 H01 H02 H03 H04 H05 H06 ITA12 3 H07 H08 H09 H10 H11 H12 -5 -9 Entry Field Salary of a soldier in service Wage received by a person summoned under law, from the workplace for which he is summoned Medical care benefits under the Industrial Accident Compensation Insurance Act Medical treatment compensation under the Labor Standards Act or the Seamen Act Unemployment allowances under the Employment Insurance Act Child-care leave allowances under the Public Officials Pension Act A lump sum refund due to death and a lump sum payment for death under the National Pension Act Medical treatment expenses under the Public Officials Pension Act 11 of Enforcement Decree of the ITA(School expenses) 12 1 of Enforcement Decree of the ITA 12 1(Allowances of committees' members unpaid under Acts and subordinate statutes, or Municipal Ordinances) 12 2~3 of Enforcement Decree of the ITA(Allowances for daynight duty, etc.) 12 3 of Enforcement Decree of the ITA (Allowances for self-employed drivers) 12 48 of Enforcement Decree of the ITA(Uniform dressed under the Enforcement Decree -18 12 911 of Enforcement Decree of the ITA(Risk premiums paid to soldiers serving in specific fields) -4 -4 -4 -4 -4 -6 -7 -8 12 12 of Enforcement Decree of the ITA (Research subsidies for teachers of educational institutions under the Early Childhood Education Act and Elementary and Secondary Education Act) 12 12 of Enforcement Decree of the ITA(Research subsidies for teachers of educational institutions under the Higher Education Act) 12 12 of Enforcement Decree of the ITA(Research subsidies for teachers of institutions as prescribed in the Ordinance of the Ministry of Finance and Economy) 12 12 of Enforcement Decree of the ITA(Research subsidies for teachers of research institute under the special Acts) 12 12 of Enforcement Decree of the ITA(Research subsidies for teachers of research institutes) 12 14 of Enforcement Decree of the ITA (Allowance for news gathering) 12 15 of Enforcement Decree of the ITA (Allowances for service in isolated areas) 12 16 of Enforcement Decree of the ITA(Wages received by a worker in such circumstances as natural disasters and other calamities) Veteran's allowances and learning allowances under the provision of the Act on the Honorable Treatment and Support of Persons, etc. of Distinguished Services to the State Allowances under the provision of the Special Treatment Act for Ex-presidents personnel and military -10 Allowances received by militaryany operational mission service officials who are stationed in a foreign country to carry out Non-taxation treatment for the year in which the military service officials's death ensues -1 16 1 of Enforcement Decree of the ITA(Amount of less than 1,000,000 won per month from among the remunerations that are received by a person by furnishing labor abroad) 16 1 of Enforcement Decree of the ITA(Amount of less than 1,500,000 won per month when receiving remunerations in exchange for furnishing labor in a pelagic fishery vessel or in a vessel serving overseas route, etc.) 16 2 of Enforcement Decree of the ITA(Allowances received for service overseas, etc) Shares borne by the State, local government or employers under the National Health Insurance Act, etc Allowances for night duty, etc. of the workers who work in production or related jobs. Tax-exempted meal cost (100thousand KRW or less per month) Meals and other food and drinks -2 Allowances, not more than 100,000 won per month, received from employers for childbirth or upbringing of children six years old or under Remunerations and retirement lump sum money received by the ROK Armed Forces Prisoners of War -11 Non-taxation on stock option -3 30% non-taxation on income of foreign workers (Abolished) -13 Non-taxation on stocks alloted by employee stock ownership association (Abolished) -14 50% non-taxation on withdrawn amount from employee stock ownership association -15 75% non-taxation on withdrawn amount from employee stock ownership association -16 Assistance in the stability of Employees' Housing Situation(Abolished) -20 Non-taxation treatment for the long-term unemployed getting employed in S/M enterprises T01 Z01 Tax exempted item designated by the Commissioner -12 Exemption of Foreign Engineers from Income Tax -17 Special Cases of Taxation for Submarine Mineral Resources Development Details of Non-taxable Income Preparation of the Payment Statement
Non-tax ation ITA12 3

ITA12 3 ITA12 3 ITA12 3 ITA12 3
H13 I01 J01 J10 K01 L01 M01
-19 Pay received by the person working in a foreign government, or an international organization
ITA12 3
M02 M03
ITA12 3 ITA12 3 ITA12 3 ITA12 3 ITA12 3 (Former) RSTA15 182 18-2 of RSTA 884 of RSTA RSTA884 100 of RSTA 30 of RSTA Designated tax exemption
N01 O01 P01 P02 Q01 R01 S01 X01 Y01 Y02 Y03 Y20 Y21
Deducti 18 of RSTA on 140(5) of RSTA
Tax Forms
89
(Page 5)
Details of Income Deduction for PensionSavings, etc.

1. Individual Information
Company Name Name Address Address of Business place

2. Retirement Pension Deduction * Details of retirement pension deduction Retirement Pension Category Financial institutions, etc.
Business Resident
Registration Registration
No. No.

(Tel. : (Tel. :
) )
Account number
Payment due
Deductible amount
3. Pension Savings Deduction * Details of pension savings deduction Pension Saving Category Financial institutions, etc. Account number Payment due Deductible amount
4. Home Purchasing Savings Deduction * Details of home purchasing savings deduction Saving Category Financial institutions, etc. Account number Payment due Deductible amount
5. Long-term stock-invested savings Deduction * Details of long-term stock-invested savings deduction Financial Account number institutions, etc.
No. of installment years
Payment due
Deductible amount
Instruction
1. Those eligible for deduction on retirement pension, pension savings, home purchasing savings, or long-term stock-invested savings should prepare detail of Income Deduction 2. Retirement pension deduction: In the Retirement Pension Category section, specify whether it is a retirement pension or Korea Scientists & Engineers Mutual-aid Association. 3. Pension savings deduction: In the Pension Savings Category section, specify whether it is an individual pension saving or a pension saving. 4. Home Purchasing Savings Deduction : In the Saving Category section, specify whether is it a saving for subscription, a Housing Total subscription saving, a long-term home purchasing saving, or a worker's home purchasing saving. 5. Long-term stock-invested savings Deduction : List accounts of different numbers of installment years if the number of installment years is incremented during the attributable taxable year even when the account is the same. 6. Wage/salary workers may not fill out the "deductible amount" column. 210 297
90
(Page 6) Residency Resident 1./Non-Resident 2 Country Code
Control No.
Receipt for Wage & Salary Monthly Income Tax Withholding

Cn ou try
Nationality Citizen 1/Foreigner 9 Applicable for foreigner's Yes 1 / No 2 flat rate Nationalit Nationality Code y
Representative Name Resident(Alien) Reg. No. Resident(Alien) Reg. No.
Total
Korea
Abroad
Company Name Tax Reg. No. Length of Service Attributable Period of Tax Exemption Details Gross Payroll of Gross Bonus Income Deemed Bonus by -1 Stock Option Execution Profit Company -2 Employee Stock Ownership Assoc. Drawings -3 -4 Total M01 O01 Child Q01 for X01
Overseas Allowances -1 Night time Allowances -2 Childbirth Care Allowances and
-3 30% Exemption Foreign employee Non-taxable -4 Income -5 -20 Other Allowances
Total of Non-taxable Income -1 Total of Deductible Income Gross Wage & Salary Adjusted Wage & Salary Income Tax Tax credit Tax paid abroad Taxpayers Ass. [(-)10/100] We acknowledge the paid tax amount above. Taxpayers Association To 1. This form is used when a tax association specified in the Article 149(1) of the Income Tax Act withholds the monthly income tax on the earned income which falls into the category specified in the Article 127-1(4) of the Income Tax Act. 2. Enter the company name and the registration number of which your actual working place for Company Name Tax Reg. No. If the business is not registered, enter the business registration number of the tax association. 210297 August. , 2010. (Signature or seal) Income Tax Local Tax Balance of tax amount
Special tax for rural development
Tax Forms
91
[Tax Form 37] <Revised on April 30, 2010>
(Page 1)
Report of Exemption & Deduction from Income/ Report of Exemption & Deduction from Wage & Salary Income
(For the Y ear-end Tax Settlement of 2010 Income)
An employee should fill in and submit this form to his/her withholding agent with documentary evidence. The withholding agent should check if the submitted form and attached documents are correct, calculate the tax amount for the employee's wage and salary income and immediately issue a withholding receipt to the employee. Later, when it is found out that the employee paid more than he had to, the withholding agent shall pay back the overpaid tax amount.
Employee Name Resident(Alien) Reg. No. Tax Registration No. Householder , Member Resident , Non-resident Same as before , Changed Nationality Period for exemption/deduction State of Residence (Nationality code: ( State Code : ) )
Employer(Company) Name Householder status Period Attributable Residency Change for personal deduction Relati onship code
If the list of personal deduction is the same as the last year, do not submit a copy of resident registration certifiate.
Name
Basic/Additional Deduction Description
Special Deduction
Newly Basic Citize under Born/ nForei Resident(Alien) Reg. Aged Newly Handica 6 years No. pped Women gner old Adopted No. of people eligible for personal deduction (No. of multiple children: ) 0 (Myself) NTS Data Other Data NTS Other NTS Other NTS Other NTS Other NTS Other Data Data Data Data Data Data Data Data Data Data
Credit Card Usage Deduction Insurance Premium Medical Expenses Education Expenses credit card debit card cash receipt Donation
Note .Per sonal 1. Relation code

Deduc tion List Category Taxpayer himself/herself (50 1 of Income Tax Act) Spose (50 2 of Income Tax Act) Sibling (50 of Income Tax Act) Relation code 0 Category Taxpayer's linear ascendant (50 of Income Tax Act) Taxpayer's linear descendant(children adopted children) (50 of Income Tax Act) EITC receiver(Except subjects of code 1~6) (50 of Income Tax Act) Relati on code 1 4* Category Spouse' linear ascendant (50 of Income Tax Act) Spouse' linear descendant(Except subjects of code 4) (50 of Income Tax Act) Fostered child (50 of Income Tax Act) Relation code 2 5*
* If a linear descendant or his/her spouse is handicapped, include the spouse. Relation codes from 4 to 6 are the relations with the taxpayer himself/herself or with the taxpayer's spouse 2. Age criteria A. Preferential treatment for senior citizens : Born on/before December 31, ( ). (Senior citizen aged 70 or older: deduction of 1 million won) B. Child aged 6 or under : Born on/after January 1, ( ). (Child aged 6 or under : deduction of 1 million won) 3. Woman deduction is only applicable to female wage & salary income earners. 4. Citizen/foreigner : Citizen=1, Foreigner=9. If a wage & salary income earner is a foreigner, specify the nationality. Refer to the table of nationality code. 5. As for the number of children, enter the number of children if you have 2 or more children eligible for basic deduction, 6. Include giro payments made to private teaching institutes in the Credit Card Usage Deduction section. In the debit card section, enter the amount made by debit cards specified in the Article of Specialized Credit Financial Business Act and the amount specified in the 126 1(4) of Restriction of Special Taxation Act)
210297( 60g/())
92
(Page 2) Items Expenditure Details National Pension Contribution

. Pension
Classification Premium Premium Premium Premium Premium Premium
Amount
Limit Total Amt. Total Amt. Total Amt. Total Amt.
Deduction Amt.
Previous Place Current Place Previous Place Current Place Previous Place Current Place
Premium Deduction
Pension Premium
Other Pension Contribution
Retirement Pension Contribution
Sub Total Health Ins (Elderly Long-term Care Ins. Included) Insurance Premium Employment Ins. Previous Place Employment Ins. Previous Place Current Place Premium Premium Premium Premium Premium Premium Total Amt. Total Amt. Total Amt. Total Amt. 1,000,000 1,000,000
General Ins. (life, accident, etc.) Insurance for the Handicapped Sub Total Him/Herself the Agedthe Handicapped Medical Expenses For Dependents Sub Total Him/Herself For Child before entering an elementary school( ) For Students ( ) (elementary, secondary, high) For Undergraduates ( ) (college or university) For the handicapped ( Sub Total Housing loans with savings Monthly rent Housing Funds Long-term mortgage loan Sub Total )
Expenses Expenses
Tuition Tuition etc. Tuition Tuition Tuition etc.
Total Amt. 3 mil/person 3 mil/person 9 mil/person Total Amt.
Education Expenses
. Special
Deduction
principle/ interest Rent amount interest
Political donation (Excluding tax credits) Donation Amt. Statutory donation Special donation (Excluding non-profit public trust) Special donation to non-profit public trust Donation Donation to employee ownership association Specified donation (except to religious organizations Specified donation to religious organizations Sub Total Donation Amt. Donation Amt. Donation Amt. Donation Amt. Donation Amt.
Tax Forms
93
Items Pension Plan Deduction
Expenditure Details Signed before Dec. 31, 2000 Signed after Jan. 1, 2001 Sub Total
Classification Contribution Contribution
Amount
Limit 720,000 or 40% of contribution
(Page 3) Deduction Amt.
Deductions for Contribution of Small-sized Company and Self-employed Mutual aid association Subscription deposit Worker's house-purchasing saving Pension Plan Deduction Housing-subscription comprehensive saving Long-term housing fund Sub Total Investment made in/before 2008 . Other Deduct ion Credit Card Usage Deduction Investment Assn. Deduction Investment made in/after 2009 Sub Total Credit cards Debit cards Cash Receipt GIRO receipt of private teaching institutes Sub Total(+++) Employee Stock Ownership Assn. Contribution
Payment Deposit Deposit Deposit Deposit Amount of investment Amount of investment Amt. used Amt. used Amt. used
Contribution Payment of 1st yr Payment of 2nd yr Payment of 3rd yr Sub Total Deduction Amt.= (20%10% 5%)
Long-term stock-invested savings deduction
Deduction for workers in s/m enterprises which maintain the same employment level Other( Kinds of Tax Credit )
Amount of wage cut
Details Foreign Source Income Amt. Paid(Foreign Currency) Amt. Paid()
Deduction Rate
Foreign Tax Tax Credit . Tax Credit
Country Date of Submi- ssion of Application
Date of Payment Overseas Working Place
Working Period Position Home Mortgage Interest Interest Paid in 2010 30% Donation for Political money Not more than 100,000 100/110 Convention b/w Government Technology Importation Contract Exemption under Restriction of Special Purpose of Entry Taxation Act Date of Tech. Importation Expiration Date of Foreign employee Or Beginning of Service Exemption Exemption Application for Date of Date of Foreign Employment Income Acception Submission In accordance with the Article 140 of the Income Tax Act, I hereby file this report. Date: . , Taxpayer :
(Signature)
. Additional documents 1. Do you submit an application form for flat tax rate of foreign employee? 2. Details of previous company Previous Company Name Tax Reg. No Previous Total Wage & Salary Previous Final Tax Liability Yes No
The Receipt Attachs? Yes No
3. Submission of statement of income deduction for pension and savings (means "Yes") or X(means "No") 4. Other documents
Submission ( ) If you apply for income deduction for retirement pension, pension savings, housing fund, long-term savings for housing purchase, etc. you should submit the corresponding statement. ), Statement of donation ( income deduction ), Other documentary evidence for
Details of medical expenses(
N ote 1. The taxpayer should file the final return of global income tax unless he or she included the wage & salary from the previous company in the year-end tax settlement. Otherwise, the taxpayer will be subject to penalty taxes. 2. The taxpayer him-/herself does not have to directly enter the pension premium, health insurance premium and employment insurance premium of the current company on the form. 3. The Deduction Amount section does not have to be filled by the wage & salary income earner when he/she submit this form to the withholding agent.

Appendix
Appendix
97
1. Major Changes in the Tax Law for 2010

1. Postponement of reduction of income tax rate (Article 55(1) of the Income Tax Act)
Before
Two-phased reduction of income tax rate until 2010 Tax Base Up to 12 million won Up to 46 million won Up to 88 million won Over 88 million won Rate 09 10 6% 6%
Now
Postponement of reduction of income tax rate for two years Tax Base Up to 12 million won 09 6% Rate 10 6% 15% 24% 35% 11 6% 15% 24% 33%
16% 15% 25% 24% 35% 33%
Up to 46 million won 16% Up to 88 million won 25% Over 88 million won 35%
2. Establishment of purpose and definition of income taxation

(Article 1 & 1-2 of the Income Tax Act)
Before
Now
Purpose(Article 1) - To enhance fairness in taxation and to finance national revenue by levying an appropriate amount of tax on individual income according to the income category and taxpayer's tax burden Definition(Article 1-2) - Resident : An individual whose domicile is in Korea or whose place of residence exists in Korea for one year or
< New >
more - Non-resident : An individual who is not a resident - Domestic corporation : A corporation of which main office in Korea or which has a de-facto controlled place for business is in Korea - Foreign corporation : A corporation of which headquarters or main office is in a foreign country (Provided that it does not have a de-facto controlled place for business) - Business owner : A resident having business income
* Effective on and after January 1, 2010
98
3. Extension of income tax filing period of persons departing from Korea

(Article 74-1 & 74-4 of the Income Tax Act)
Before
Period of filing return on the tax base for persons departing from Korea - No later than 10 days from the date of departure
Now
Adjustment of filing period - No later than 1 day from the date of departure
* Effective for the persons departing from Korea on and after Jan. 1st, 2010.
4. Rationalization of special taxation for foreign workers

(Article 18-2 of the Restriction of Special Taxation Act) (Article 16-2 of the Enforcement Decree of the Restriction of Special Taxation Act)
Before
Subjects - A foreign engineer who provides his/her services within in Korea under a contract for the introduction of technologies, which are exempted from income tax or corporate tax - Technology-intensive industry, research institutes invested by the scientific circles or government, etc. Exemption treatment - 100% exemption treatment of the earned income for his/her services for the first 5 years Sunset - A foreign engineers sho provided his/her services before Dec. 31, 2009
Now
Subjects - A foreign engineer who provides his/her services of high technology to a foreign invested company which is exempted from taxation for the introduction of high technologies - (Same as the existing provision).
Exemption treatment - 50% exemption treatment of the earned income for his/her services for the first 2 years Sunset - Extended from Dec. 31, 2009 to Dec. 31, 2011
* Effective for services provided on and after Jan. 1st, 2010. * Foreign engineers who provided services before Dec. 31, 2009 or under a reported contract for the introduction of technologies, they are subject to the previous regulation, thus exempted 100% for the remaining period.
Appendix
99
5. Adjustment of the scope of foreign engineers exempted from earned income

(Article 16-1 of the Enforcement Decree of the Restriction of Special Taxation Act)
Before
Foreign engineers prescribed by the Presidential Decree - Foreigners who provide technology * Korean nationals who have permanent residency in other countries are deemed foreigners by the regulation concerned
Now
Adjustment the scope - Persons who doesn't have Korean nationality * Korean nationals who have permanent residency in other countries are excluded from the scope of foreign engineers
* Effective for the income incurred in the taxation year to which Feb. 18, 2009 belongs
6. Adjustment of income deduction for usage of credit cards, cash receipts, etc.
(Article 126-2(1) of the Restriction of Special Taxation Act) (Article 121-2(6) of the Enforcement Decree of the Restriction of Special Taxation Act)
Before
Minimum usage - 20% of total wage and salary income Deduction rate : 20%
Now
The amount of the minimum usage is increased. - 25% of total wage and salary income Differential deduction rates - Credit cards and cash receipts : 20% - Debit /Check cards and prepaid cards : 25% Deduction ceiling : 3 million won Sunset : Dec. 31, 2011 (Extended for 2 years)
Deduction ceiling : 5 million won Sunset : Dec. 31, 2009
7. Sunset of income deduction for medical expenses with cosmetic/plastic surgery

(Article 110(2) of the Enforcement Decree of the Income Tax Act)
Before
Income deduction for medical expenses such as cosmetic/plastic surgery and health promotion medicine December 31, 2009 - Sunset : Sunset
Now
* Effective for expenses made on and after January 1, 2010
100
8. Abolition of classification of class A income and class B income

(Article 20 & 73& 137& 150 of the Income Tax Act)
Before
Classification of wage and salary income - Class A income ) Wage & salary, bonus, allowance and similar kinds ) Bonus derived by appropriation of earnings ) Constructive bonus, etc. - Class B income ) Wage & salary income received from a foreign organization or the UN forces stationed in Korea (Except US army) ) Wage & salary income received from a non-resident living in a foreign country or a foreign corporation located in a foreign country
Now
Abolition of classification of class A and class B income - Wage and Salary income ) (Same) ) (Same) ) (Same) - Abolition of classification of class A and class B income ) (Same) ) (Same)
9. Expansion of non-taxation treatment for child care allowance

(Article 12(3) of the Income Tax Act)
Before
Criteria for child care allowance - Child care allowance of up to 100 thousand won per month for a child aged 6 or under * Published rulings : Applicable to children aged 6 or under as of the month in which the payment is made
Now
Applicable to children aged 6 or under as of the first date of the taxable period
Appendix
101
10. Extension of the period of carry-over deduction for donated amount and permission of carry-over deduction for wage and salary income earners
(Article 34(3) & 52(8) of the Income Tax Act) (Article 73 of the Restriction of Special Taxation Act)
Before
Period of carry-over deduction - Specified donation* : 3yrs. - Special donation :
**
Now
Extension of the period - Specified donation : 5yrs. - Special donation : 2 yrs. - Statutory donation : 1 yr promote education, Subjects of carry-over deduction ; wage & salary income earners, privately owned businesses and corporations welfare
1 yr
- Statutory donation : n/a * Donations made to
scholarship, technology improvement, culture & arts, environmental communities, etc. ** Donations to the Korean government, local autonomous facilities, etc. Subjects of carry-over deduction ; privately owned businesses and corporations government bodies,
* Effective for donations made on and after January 1, 2010
102
2. Foreign Taxpayer Services

The NTS offers various tax services for foreign taxpayers to help them better handle their tax issues in Korea. Foreign Taxpayer Service Desk Foreign Taxpayer Service Desk is installed at the taxpayer service center of 57 district tax offices nationwide. It helps facilitate communication with foreigners visiting tax offices and provide one-stop tax services. Foreign Taxpayer Service Desk (at 57 DTOs as of March 10, 2010) Area Seoul Incheon, Gyeonggi-do Daejeon, Chungcheongnam-do Gwangju, Jeollanam-do Daegu, Gyeongsangbuk-do Busan, Gyeongsangnam-do District Tax Office All District tax offices Seongnam, Suwon, Ansan, Uijeongbu, Incheon, Pyeongtaek, Siheung, Namincheon, Seoincheon, Goyang Yongin, Bucheon, Incheon Seodaejeon, Cheonan Mokpo, Seogwangju, Bukgwangju, Iksan Gumi, SeoDaegu, BukDaegu, NamDaegu Busanjin, Suyeong, Changwon, Bukbusan, Ulsan, Dongulsan, Jeju, Tongyoung, Dongrae, Kimhae No. of district tax offices 24
13
2 4 4 10
NTS English Website (www.nts.go.kr/eng Help Desk) Q&A/FAQ and Foreign Taxpayer Advocate Service: the two services in the Help Desk corner enable foreigners to place tax inquires including tax difficulties online My Withholding Income Tax Calculator: taxpayers may calculate expected amount of monthly withholding taxes. Automatic Calculation Service for Year-end Tax Settlement: taxpayers may calculate the expected amount of adjusted withholding taxes for the year-end tax settlement.
Appendix
103
English tax booklets and various Forms (e.g., Easy Guide for Foreigners Year-end Tax Settlement and Individual Income Tax and Benefit Guide for Foreigners) NTS English Assistance Hotline ( 1588-0560) The Hotline offers foreigners tax advice in English over the phone, and is operated by National Tax consultation Center Interpretation Service for Foreigners The NTS now offers interpretation services in 18 languages upon a partnership with the Total Information Center for Foreigners of the Ministry of Justice. This service is to help foreigners who have experienced difficulties at the time of consult on tax related issues. The interpretation service is available in the regional tax offices and district tax offices. The service is also accessible for the tele-consultation. 1. Tax offices offering the interpretation service - The NTS headquarters, 6 regional tax offices, and district tax offices (including the taxpayers service center) - How to check your district tax office http://www.nts.go.kr/eng Help Desk Contact Your District Tax Office 2. How to use the interpretation service - Inform a tax official in the office that you need an interpretation service in a different language. The request should be made in Korean or English. 3. Available languages (18 languages) - English, Chinese, Japanese, French, Russian, German, Spanish, Vietnamese, Mongolian, Indonesian, Thai, Bengalese, Urdu, Nepalese, Khmer, Myanmarese, Arabic, Sinhalese (to be offered soon)
104
3. Taxpayer Association
Name United States Embassy Embassy of Japan Abroad Employment Global Ilsin Korea Namsan Seoul Regional Kangnam Seyang Amkor KwangGyo Korean Mariners Youngnam DongJin CS Geoje Ulsan 397-4348 2170-5267 757-9582 3276-0531 567-9100 730-7190 3438-2488 784-9265 2112-7814 3703-8745 460-5154 3453-8004 (051) 462-3633 (051) 636-3893 (051) 336-5518 (051) 740-6833 (055) 688-2141 (052) 227-3082 Tel Location 82 Sejongno, Jongno-gu, Seoul 18-11 Junghak-dong, Jongno-gu, Seoul 1002, Boseung Bldg, 163-3 Euljiro 2-ga, Jung-gu, Seoul 5th Fl, 92 Galwol-dong, Yongsan-gu, Seoul 4th Fl. KM Bldg. 130-10, Samsung-dong, Gangnam-gu, Seoul 1132, Doosanweeve Bldg. 58 Susong-dong, Jongno-gu, Seoul 71-2 Nonhyeon-dong, Gangnam-gu, Seoul 25-15 Yeoeuido-dong, Yeongdeungpo-gu, Seoul 31-57 Seongbuk-dong, Seongbuk-gu, Seoul 1607, Gwanghwamun Platinum Bldg, 156 Jeokseon-dong, Jongno-gu, Seoul 280-8 Seongsu 2-ga, Seongdong-gu, Seoul 8th Fl, Dongyeong Munhwa Center, 772 Yeoksam-dong, Gangnam-gu, Seoul 84-14 Jungangdong 4-ga, Jung-gu, Busan 541Ho Jayu Market Bldg., 830-24, Beomil-dong, Dong-gu, Busan 1211-1 Choryang-dong, Dong-gu, Busan 1502, Ocean Tower, 760-3 Woo 1-dong, Heaudea-gu, Busan 555-1, Okpo, Geoje 1st Fl, Korea Shipping Bldg, 1602-4 Samsan-dong, Nam-gu, Ulsan
National Tax Service provides following foreign taxpayer services.

Foreign Taxpayer Help-line (English) Q&A, Foreign Taxpayer Advocate (English) English Web Page of NTS NTS Customer Satisfaction Center NTS Hometax Service 1588-0560 www.nts.go.kr/eng www.nts.go.kr/eng 126 www.hometax.go.kr
Easy Guide for Foreigners' Year-end Tax Settlement 2010
Issue Date : December, 2010 Publisher : International Tax Resources Management Division, National Tax Service of Korea Edited by : Director Jung, Kyung-suk Deputy Director Bhan, Jae-hoon Tax Inspector Tax Inspector Editor Kim, Byung-man Kim, Mi-ae Kim, Eun-hyei
This book was published to present a brief overview of the taxation of Wage & Salary Income Earner. Its contents are also provided on the NTS website. If any discrepancies are found between its contents and the current Korean Tax Code, the latter shall prevail. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the International Resource Management Office. ( 02-397-14368)

2010 - Easy - Guide For Foreigner's Year-End Tax Settlement

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2010 - Easy - Guide For Foreigner's Year-End Tax Settlement

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Easy Guide for Foreigners' Year-end Tax Settlement

National Tax Service

Easy Guide for Foreigners' Year-end Tax Settlement

Flowchart of Year-end Tax Settlement of Wage & Salary Income Tax

Easy Guide for Foreigners' Year-end Tax Settlement

Easy Guide for Foreigners' Year-end Tax Settlement

Summary of Changes to Tax Laws for 2010 Year-end Tax Settlement

Carry-over deduction for <NEW> donated amount

Income tax reduction for foreign technical engineers

Easy Guide for Foreigners' Year-end Tax Settlement

Summary of Deductibility of Residents and non-residents

Easy Guide for Foreigners' Year-end Tax Settlement

Schedule for the Year-end Tax Settlement attributable to 2010

The company notifies any missing evidence to employees.

Submit Statement on Wage & Salary Payment

Easy Guide for Foreigners' Year-end Tax Settlement

Simplified Year-end Tax Settlement(www.yesone.go.kr)

Easy Guide for Foreigners' Year-end Tax Settlement

Simplified Year-end Tax Settlement Web-site

Easy Guide for Foreigners' Year-end Tax Settlement

Simplified Year-end Tax Settlement Web-site

E. Things To Prepare for the Year-end Tax Settlement 23

. Year-end Tax Settlement for Wage and Salary Income

A. Scope of Wage & Salary Income 27

B. Deduction for Wage & Salary Income 29 C. Personal Deduction 30

D. Pension Contribution Deduction 35 E. Special Deduction 35

G. Calculated Income Tax 44

H. Tax Exemption & Tax Credit 44

. Examples of Income Tax Calculation

. Examples of Actual Q&A on NTS website

Easy Guide for Foreigners' Year-end Tax Settlement

3 Difference in Tax Treatment

Global and Separate Income Taxation

Income derived by residents and non-residents is subject to global or separate respectively.

Monthly Tax Withholding

Easy Guide for Foreigners' Year-end Tax Settlement

Year-end Tax Settlement

1) Employee who has worked for two different companies in 2010

2 Employee who changes its workplace in 2010

3 Year-end Tax Settlement by the Taxpayers' Associations

In case of not conducting the Year-end Tax Settlement

5 Employee who retires during the year

Easy Guide for Foreigners' Year-end Tax Settlement

E. Things to Prepare for the Year-end Tax Settlem ent

Proof of Documents for Deductions

2 Certificate of the Facts of Alien Registration

Easy Guide for Foreigners' Year-end Tax Settlement

Summary of evidence and documentation for income deduction

Immigration office or city, county, or district office

Copy of Receipt for Insurance Payment

Copy of Receipt for Medical Expenses

Hospitals, pharmacies, etc.

School or vocational training facilities Organizations who received donations Taxpayer

Receipt of Credit card payments

Credit card, debit card, prepaid card companies, etc.

Exemption Report of Foreigner's Employment Income

Foreign Tax Credit Report

. Year-end Tax Settlement for Wage & Salary Income

Scope of Wage & Salary Income

2 Income That Is Not Regarded As Employment Income

Easy Guide for Foreigners' Year-end Tax Settlement

3 Non-taxable Wage & Salary Income