February Tax schedule in Korea

 

1.Preparation for Year-end tax settlement 

Nevertheless, the legal due date for the year-end tax settlement for employees is March 10th, but every company should complete the process in February (and many companies do it in January as well).

Year-end tax settlement applies only to individuals working as employees of a company.

• If you are an individual business owner, you do not need to do a year-end tax settlement for yourself. However, if you have employees and pay them a salary, you must conduct their year-end tax settlement, as it is the company’s responsibility.
• If you are a corporate business owner (CEO) and receive a salary from your company, you must complete the year-end tax settlement as an employee of the corporation.

 

 

If you're curious about why companies and employees need to complete the year-end tax settlement, please check our previous post below.

Year-end taxsettelemt Guide for Foreign employees in Korea -1

 

It's a simple guide with screenshots on how to obtain documents from the Hometax website.

 

 

Year-end taxsettelemt Guide for Foreign employees in Korea -2 Way to download hometax PDF file

 

If you have already completed the year-end tax settlement, you must check the this

 

Year-end taxsettelemt Guide for Foreign employees in Korea -3 What should be checked after year-end tax settlement?

 

2.Withholding tax filing(10th Feb)

When you pay your employees a salary, it is your responsibility to deduct taxes from their salary before paying them.

*For example, if your employee has a contracted salary of 2,500,000 KRW, you must deduct 35,600 KRW for taxes, and pay your employee 2,464,400 KRW. The 35,600 KRW you deducted must be reported on a withhold tax return and paid to the tax office on behalf of your employees.

The deadline for filing the withholding tax return is the 10th day of the following month after the payment was made. So, if you paid salaries to your employees in Oct, you must file the withholding tax return by Nov11th(it's typically 10th but as 10th November is Sunday, it's 11th)

It's important to understand that the requirement to file a withholding tax return is not limited to salary payments. Any payment that requires taxes to be withheld must be reported on the withholding tax return.

*For instance, if you paid a loyalty payment to a foreign entity, you must also withhold taxes and report the payment on the withholding tax return.

*If you want to know about non-taxable items for your salary, Please refer below link.

 

3.Submission of payment statement.(28th Feb) 

The payment statement is a necessary document that outlines information about the individuals or entities who have received payments from you. This includes details about their income and any taxes that have been withheld.

*For instance, when you pay your employees, you are required to withhold taxes and pay them to the tax office. Additionally, you must submit a payment statement to the tax office to report the withheld taxes.

 

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G-tax(Seoul, Korea) Tax firm specializing in foreign companies

If you are in search of a reliable English-speaking tax accountant, please don't hesitate to contact us! G-Tax Firm specializes in providing tax services exclusively for foreigners and foreign corporations in Korea. With extensive experience working with international companies, you can trust us for accurate and professional assistance

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