Korea, Republic of

Individual - Foreign tax relief and tax treaties

Last reviewed - 28 March 2024

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 income tax treaties with 95 countries as of December 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 Peru
Algeria Iceland Philippines
Australia India Poland
Austria Indonesia Portugal
Azerbaijan, Republic of Iran Qatar
Bahrain Ireland, Republic of Romania
Bangladesh Israel Russia
Belarus Italy Saudi Arabia
Belgium Japan Serbia
Brazil Jordan Singapore
Brunei Kazakhstan Slovak, Republic of
Bulgaria Kenya Slovenia
Cambodia Kuwait South Africa, Republic of
Canada Kyrgyzstan Spain
Chile Laos Sri Lanka
China, People's Republic of Latvia Sweden
Colombia, Republic of Lithuania Switzerland
Croatia Luxembourg

Taiwan

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 Papua New Guinea

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 January 2024.

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 January 2024. 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.