Foreign employees working in Korea may elect to have their employment income subject to a flat tax rate of 19% (rather than a progressive income tax rate with the highest marginal tax rate) for five years from the date they start working in Korea. This flat tax rate was supposed to apply for those who start to work in Korea by the end of December 2018. However, based on the recent tax reform, this flat tax rate can be elected for those who initially started to work in Korea by the end of December 2021.
In addition, for two years from the date the expatriate starts to render services in Korea, a 50% tax-exempt treatment has been applied to wages received by a qualified foreign technician/engineer providing services in Korea to a domestic entity. However, based on the tax reform, the applicable period for tax exemption has been extended to five years and this extended period will be applied for those who initially start to work in Korea on or after 1 January 2019, but no later than December 2021.
Last Reviewed - 10 January 2020