Korea, Republic of

Individual - Foreign tax relief and tax treaties

Last reviewed - 06 July 2023

Foreign tax relief

A tax credit for foreign income taxes paid abroad by Korean residents, up to a limit of the amount of Korean income taxes before the foreign tax credit times the ratio of foreign source income to worldwide total taxable income. Any excess over the maximum allowable credit may be carried forward for ten years. Alternatively, foreign tax paid can be deducted from taxable income.

Tax treaties

Double taxation avoidance agreements

Korea currently has treaties with the below mentioned countries as of January 2023: In order to apply the reduced withholding rates under tax treaties, an application form must be submitted to the Korean entity paying the income (acting as a withholding agent) with a document providing that the applicant is a beneficiary of domestic-source income.

Albania Hungary Papua New Guinea
Algeria Iceland Peru
Australia India Philippines
Austria Indonesia Poland
Azerbaijan, Republic of Iran Portugal
Bahrain Ireland, Republic of Qatar
Bangladesh Israel Romania
Belarus Italy Russia
Belgium Japan Saudi Arabia
Brazil Jordan Serbia
Brunei Kazakhstan Singapore
Bulgaria Kenya Slovak, Republic of
Cambodia Kuwait Slovenia
Canada Kyrgyzstan South Africa, Republic of
Chile Laos Spain
China, People's Republic of Latvia Sri Lanka
Colombia, Republic of Lithuania Sweden
Croatia Luxembourg Switzerland
Czech Republic Malaysia Tajikistan
Denmark Malta Thailand
Ecuador Mexico Tunisia
Egypt Mongolia Turkey
Estonia Morocco Turkmenistan
Ethiopia Myanmar Ukraine
Fiji Nepal United Arab Emirates
Finland Netherlands United Kingdom
France New Zealand United States
Gabon Norway Uruguay
Georgia Oman Uzbekistan
Germany Pakistan Venezuela
Greece Panama Vietnam
Hong Kong

Tax information exchange agreements (TIEAs)

Besides income tax treaties to avoid the double taxation, Korea concluded TIEAs with many countries, including certain tax havens and those that provisionally reached such agreements. TIEA coverage extends to Andorra, Bermuda, British Virgin Islands, and Cook Islands, to name a few. TIEAs cover information required for the administration and enforcement of domestic tax laws, including details on taxpayer registration, corporate ownership details, companies’ accounting records and financial statements of a specific transaction, and individual or corporate financial transaction information. TIEAs establish a framework for Korea to curb abusive tax avoidance transactions using tax havens, as well as unveil and levy taxes on offshore tax avoidance transactions. In addition, Korea is one of 147 countries that have joined the Multilateral Convention on Mutual Administrative Assistance in Tax Matters as of March 2023.

Social security (totalisation) agreements

Korea currently has social security agreements in effect with Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, China, Croatia, the Czech Republic, Denmark, Finland, France, Germany, Hungary, India, Iran, Ireland, Italy, Japan, Luxembourg, Mongolia, the Netherlands, New Zealand, Peru, Poland, Quebec, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Uruguay, the United Kingdom, the United States, and Uzbekistan as of April 2023. The social security agreements are intended to help those who have contributed premiums to the national pension plans of two different countries; it allows them to obtain benefit eligibility by combining total periods of coverage in both countries (i.e. totalisation). Nonetheless, the agreement must be reviewed since detailed provisions can vary depending on the respective agreement.