Korea, Republic of

Territoriality and residency

A taxpayer in Korea, who is liable to pay the income tax on their income, is classified into resident and non-resident for income tax purposes, as listed below.

• Resident: Any individuals having a domicile in Korea or having a residence within Korea for 183 days or more in a tax year, individuals having an occupation that would generally require them to reside in Korea for 183 days or more, or individuals who are deemed to reside in Korea for 183 days or more in a tax year by accompanying families in Korea or by retaining substantial assets in Korea. On the other hand, even when a person has a job overseas and stayed there for more than 183 days in a tax year, but they have their general living relationship, including their family and property, in Korea, they still can be regarded as a resident of Korea. Generally, residency is determined on a ‘facts and circumstances’ test and evaluated on an individual basis.
• Non-resident: An individual who is not to be considered a resident. Should a foreigner be classified as both a resident of Korea and a resident of the home country, the taxing rights over such non-resident are placed in direct competition with each other. In that case, the primary country of residence is selected in accordance with the provisions regarding determination of residency under the tax treaty between the two countries (see Tax treaties in the Foreign tax relief and tax treaties section for more information).