Korea, Republic of

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 (see the Residence section for more information).

A resident is subject to income tax on all incomes derived from sources both within and outside Korea. Foreign residents who have stayed in Korea for longer than five years during the last ten-year period are taxed on their worldwide income. However, foreign residents who have stayed in Korea for five years or less during the last ten-year period are taxed on Korea-source income, and foreign-source income is reportable only in the case where foreign-source income is paid by a Korean entity or transferred to Korea.

A non-resident is subject to income tax only on income derived from sources within Korea. When a non-resident who does not have a domestic place of business has Korea-source income to report through an annual tax return, most provisions concerning the tax rates and the filing procedures of residents shall apply to them. However, in calculating taxable income and tax amount, a non-resident is not entitled to claim any personal exemptions for their dependants (except for themselves), income deductions, and tax credits.

Personal income tax (PIT) rates

The following tax table summarises the basic global income tax rates applicable for the income received from 1 January 2023 and thereafter.

* Korean won

** Before applying the local income tax.

Local income tax

Besides the above PIT, there is also a local income tax that is assessed at a rate of 10% of the PIT rates.

• PIT is paid to the National Tax Service (NTS).
• Local income tax is paid to the city or the province that is the domicile of the taxpayer.

Alternative minimum tax (AMT)

The AMT, with exceptions, will be calculated at the greater of 45% of income tax liability (35% applied to income tax liabilities of up to KRW 30 million) before exemptions or actual tax after exemptions.

The AMT is applied to business income of a resident individual and Korean-source business income of a non-resident individual, but it is not applied to employment income.