How to report your tax in Korea? -3

www.g-tax.kr

Followed by my last posting, I will explain your report obligation of other income / financial income / pension income

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If you want see previous postings, please click below link.

How to report your tax in Korea? -1

How to report your tax in Korea? -2

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3.Other income

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1.your taxes will be withholed from your other income

​When you get money as other income, your taxes will be withholded from your other income. Typically withholding tax rate is 22%(Incl.local tax) but it's different what kind of other income it is.

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*Withholding tax rates of other income

A.Where the amount of income under Article 14 (3) 8 (d) and (e)​(->the lottery prize) exceeds 300 million won	33% of such excess (Incl.Local tax)
B.With regard to other income under Article 21 (1) 18 or 21(Related to mutual aid fund, pension),	16.5% (Incl.Local tax)
D.With regard to any income other than those specified above,	22% (Incl.Local tax)

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2.Filing global income tax return obligation is depending on your income amounts.

​When your total other income amounts of tax year are not exceed 3,000,000 won, you don't have a obligation to file global income tax return. because as you can see below picture, other income of not more than 3million are sorted as non-inclusuion in global income.

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So if your total other income amounts are below 3,000,000 you can choose to file global inocme tax return or not.

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when you have business income or salary income besides your other income, so you should add your other income to these income, you should check your tax rate. if your tax rates are lower than your other income withholing tax rate, filing global income tax return is advantageous to you. in opposite, it's better not to file it.

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4.Interest income / 5. dividend income

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1.Bank will withhold taxes from your bank account.

​Withholding tax rates are 14%, in special case like you get interst from someone which is not bank, it's 25%.

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2.Filing global income tax return obligation is depending on your income amounts

​As same as Other income obligation, filing obligation is depeding on your interest and dividend income amounts.

when your financial income(interest income + dividend income) exceed 20million won per year, you should file global income tax return.

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When your financial income are below 20million, your financial income are not aggregated with other income types and all tax liabilites are settled at the time of withholidng. so you don't need to file global income tax return.

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6.Pension income

Most of you who read this article will not have pension income.(because it's for usually who have Korea nationality)

So, For pension income tax obligation, Please below income tax law Article 14.

Article 14 (Calculation of Tax Base) (3) None of the following income shall be included when calculating the tax base of global income: ​ 9.The following pension income​, out of the pension income under Article 20-3 (1) 2 and 3 (excluding where a resident with the income referred to in item (c) intends to include it when calculating the tax base of global income; hereinafter referred to as "pension income subject to separate taxation" ​ (a)pension income received as retirement income under Article 20-3 ​(1) 2 (a) ​ (b)Pension income withdrawn in the amount specified in Article 20-3 (1) 2 (b) or (c) where the requirements specified by Presidential Decree are met, for the purpose of medical treatment or due to a natural disaster or any other inevitable circumstances ​ (c)Pension income where the sum of any pension income other than the income referred to in items (a) and (b) does not exceed 12 million won per year

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Thank you for read my article! I hope it helps.

If you want to see more information about Korea tax and accounting, please follow us.

And if you need help for your tax filing or accountung or looking for CPA in Korea, don't hesitate to contace us

you can contact us easily through direct message

G-tax / Certified Tax Accountant / Steven Yang

+82 10 9599 7152

steven@g-tax.kr

www.g-tax.kr

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