South Korea

A resident is anyone with a domicile in Korea, or who resides in Korea for 183 days or more in a tax year (or, from tax years beginning in 2026, for a consecutive 183 days spanning two tax years), evaluated in part on a facts-and-circumstances basis that can also weigh occupation, family location, and assets held in Korea.

The Korean tax year is the calendar year. An individual income tax return is filed and any tax paid between 1 and 31 May of the following year, though expatriates receiving only Class A (withheld) salary income are not required to file before leaving Korea and instead submit documents for their employer's year-end settlement.

A non-resident is taxed only on Korea-source income. A non-resident without a domestic place of business who must file an annual return is generally subject to the same tax rates and filing procedures as a resident, but cannot claim personal exemptions for dependants, most income deductions, or most tax credits.

Salary and wage earners get an employment income deduction on a sliding scale, capped at KRW 20 million, and national pension contributions are fully deductible. Tax credits are separately available for dependent children, charitable contributions (15% up to KRW 10 million, 30% above it), and education expenses.

Foreign expatriates and employees who start work in Korea by 31 December 2026 may elect a flat 19% income tax rate, excluding the local income tax, on their employment income for up to a 20-year period, instead of the ordinary 6%-45% progressive schedule — forfeiting other income deductions, exemptions, and tax credits in exchange.

Exports of goods, international transportation by ship or aircraft, and certain listed services supplied to non-residents or foreign corporations and paid for in foreign currency are zero-rated; zero-rating a subset of those services — professional services (legal, accounting, tax, advisory, market survey, management consulting), business support, and investment advisory services — additionally requires reciprocity. VAT is exempt on basic necessities such as unprocessed foods and agricultural products, medical and health services, finance and insurance services, and duty-free goods.