Individual Income Tax and Benefit Guide For Foreigners 2009

정 부 간 행 물 등 록 번 호
“Paying taxes, it’

s our noble duty 11-1210000-000044-10
and the most beautiful act of giving back”
Individual Income Tax and Benefit Guide for Foreigners 2009

(For use in preparing 2008 returns )
Individual Income Tax and

Benefit Guide for Foreigners 2009
Individual Income Tax and Benefit Guide
for Foreigners 2009
(For use in preparing 2008 returns)
May, 2009
National Tax Service

PREFACE
We, the National Tax Service of Korea, would like to express our deep
appreciation for your faithful tax compliance and contribution to the development
of the Korean economy.
As Korea’s globalized economy has invited more and more foreigners into Korea
to furnish services and to carry on businesses, we felt the need to provide you
with proper guidance and assistance in tax return filing and tax payment.
To this end, the NTS has implemented various customized services for foreign
taxpayers such as ｢Help-line for Foreigners(02-397-1440)｣, ｢Foreign Taxpayer Advocate
Service｣ and ｢Q&A section by E-mail｣ at our English web-site(www.nts.go.kr/eng).
In particular, ｢Foreign Taxpayer Service Desk｣ has been installed in 45 district tax
offices most frequently visited by foreign taxpayers since last year, and ｢Foreign
Taxpayers’ Guide to Korean Taxes｣, which contains questions and corresponding
answers in both English and Korean, was released in July, 2008.
We also prepared this booklet to give a wide range of information on the Korean
Individual Income Tax Law and general information for tax return, explaining
important changes in 2008 on income tax laws in the areas of tax rates,
allowances and legislation, etc. It is especially designed to help foreigners prepare
for their 2008 income tax returns due on June 1, 2009.
We sincerely hope that this Guide will be of interest and benefit to all foreign
taxpayers.
May, 2009
Yun Jun Park

Assistant Commissioner for International Taxation
- i -
Individual Incom e T ax and B enefit G uide for Foreigne rs 2009
Figure 1. Global Individual Income Taxation of Korea
Capital
Income
Financial
Income
Interest Dividend Real Estate Business Wage Pension Other

Income Income Rental Income Income Income Income Income
Joint Return
△ Income
Deduction
Tax Base
× Tax Rate
(8% ～ 35%)
Tax
Calculated
△ Tax Prepaid
Penalty Tax
△ Tax Exemption․
Credit
Tax payable
The Korean individual income tax system uses the unitary concept where incomes
from all sources are aggregated and taxed at progressive rates. Deductions and tax
credits are allowed under certain conditions. Inhabitant tax is added to income tax in
computing the total tax liability. Penalties may be assessed for failure of return-filing
and tax payment.
- ii -
Individual Incom e T ax and B enefit G uide for Foreigne rs 2009
Figure 2. Individual Income Taxation on the Income of Non-resident
Domestic
No : Law applied
Is there
Domestic
Is there Source Income
Income Tax based on Tax
Accruing Treaty? Treaty and
Domestic
Law?
Tax Treaty
Yes : has priority
Non-taxable
No : in Korea
Tax
Yes : Exempted
Yes Tax-free Income?
No
No Tax Withholding
Domestic with a few exceptions

No
Business Place?
Is the Income
Yes Attributable to
Domestic
Business Place?
Yes Return-filing
Global Taxation
with a few exceptions
- iii -
National Tax Service English Web-site
<www.nts.go.kr/eng>
- v -
CO NTENTS 1
CONTENTS
◈ What are Major Changes for 2009 ?
Part Ⅰ Introduction
At your Service / 23
A. What if you need help ? ································································ 23
B. Before you contact us ··································································· 23
C. Contacting us ················································································ 23
D. Your opinion matters ! ·································································· 24
General Information / 24
A. Do you have to file a return ? ······················································· 24
B. What date is your return for 2008 due ? ······································· 24
C. What do you include with your return and
what records do you keep ? ·························································· 25
D. Where do you have to file and pay ? ············································ 26
E. What penalties do we charge ? ······················································ 26
F. What happens to your return after we receive it ? ························· 27
G. When can you expect your refund ? ············································· 27
H. Do you report foreign income and other amounts ? ····················· 27
I. What is the "Enforcement of Standard⋅Simplified
Expense Rate System"? ································································· 27
J. Frequently Asked Question ··························································· 31
Part Ⅱ Outline of Individual Income Tax System

Taxpayer / 35
A. Resident ························································································ 35
B. Non-Resident ················································································ 35
Income / 36
A. Taxable Income ············································································ 36
B. Non-taxable Income ······································································ 40
C. Tax-exempt Income ······································································ 43
Tax Base and Deductions / 45
A. Basic Rules for Calculating the Tax Base ···································· 45
B. Calculation of Tax Base(Taxable Income) ··································· 47
C. Deduction For Global Income ······················································ 57
Tax Rates and Tax Credits / 61
A. Tax Rates Structure ······································································ 61
B. Tax Credits ···················································································· 61
Return and Payment / 64
A. Tax Return ···················································································· 64
B. Tax Payments ················································································ 66
Global Income Tax of Compliant SMEs / 69
A. Application of Simplified Method for Tax Calculation ··············· 69
B. Eligibility of Compliant SMEs ····················································· 69
C. Special Tax Treatment in Calculating Tax Base ·························· 69
2 CO NTENTS
D. Special Tax Treatment for Tax Credits ········································ 70

Assessment and Collection / 70
A. Determination and Correction of Tax Base and Tax Amount ······ 70
B. Notice on Tax Base and Tax Payable ··········································· 70
C. Collection of Tax ·········································································· 71
D. Minimum Taxable Floor ······························································ 71
Tax Withholding / 71
A. Obligation of Tax Withholding ···················································· 71
B. Rates of Withholding ···································································· 72
Tax Penalties / 74
A. Penalty on Failure to File Returns ················································ 74
B. Penalty on Non-payment or Underpayment of Tax ······················ 74
C. Penalty Tax on Failures to Withhold Tax ····································· 74
D. Penalty Tax on Failures to Report Withholding Payment Records ···· 75
E. Penalty Tax on Failures to Maintain Adequate Books and Records ··· 75
F. Penalty Tax on Failure to use Business Purpose Bank Account ··· 75
Bookkeeping and Reporting / 76
A. Bookkeeping ················································································· 76
B. Reporting ······················································································ 76
Part Ⅲ Individual Income Tax System for Non-resident

Taxation on Non-resident / 79
A. General ·························································································· 79
B. Income from Domestic Sources ···················································· 79
C. Domestic Business Place ······························································ 82
D. Tax Withholding on Non-resident ················································ 84
Taxation on Wage & Salary Income of Non-resident / 86
A. Non-resident with Class A Wage &
Salary Income Only ······································································ 86
B. Non-resident with Class B Wage &
Salary Income Only ······································································ 86
C. Non-resident with Class A and Class B
Wage & Salary Income ································································ 87
Part Ⅳ Practice
Practice in Calculating / 91
A. Example : Lecturer (Wage &
Salary Income + Other Income) ······················································ 91
Part Ⅴ Forms
Appendix
A. Income Tax Calculation Chart for Resident ESL Teachers ·········· 137
B. Tax Office in Major Cities ··························································· 138
C. Taxpayers Association ································································· 141
D. Treaties with foreign countries ····················································· 142
What are Major Changes
for 2009?
Indiv idua l Incom e T a x and B e nefit G uide for Fore igners 2009 5
What are major changes for 2009 ?

This section summarizes important tax changes that took effect in 2008.
1. Deduction limit extended for individual's designated

contribution
(Article 34(1)․ Article 52(6) of the Income Tax Act)
1. Purpose of Revision
◦ To promote the culture of contribution by individuals

◦ The revised law will be implemented along with measures to improve
the transparency of donors and recipients.
2. Changes
Before Now
◦ Limit for individuals' designated ◦ Under the revised law, limit for
contribution or for necessary deduction is extended.
expenses: 10% of the income - 15% in 2008 and 20% in 2010
amount * Religious organizations maintain the
current 10% limit.
3. Date of Enforcement
◦ Effective for contribution made on and after Jan. 1, 2008

6 W hat are M ajor changes for 2009?
2. Profit or loss from valuation of monetary foreign

currency assets & liabilities non-deductible
(Article 97 of the Enforcement Decree of the Income Tax Act)
◦ Profit or loss from valuation of monetary foreign currency assets

& liabilities according to business accounting standards is
unrealized profit.
- Imposing taxes on unrealized profit or acknowledging unrealized losses is not
in line with obligation principle.
2. Changes
Before Now
◦ Monetary foreign currency assets & ◦ Profit or loss from monetary

liabilities according to business foreign currency assets &
accounting standards had to be liabilities is not deductible.
evaluated.
- Valuation method : acknowledgment

of profit or loss from valuation
․ Monetary foreign currency assets

& liabilities were evaluated based
on basic exchange rate or
arbitrated exchange rate according
to the Foreign Exchange
Transaction Act as of the end
date of the taxation period.
◦ Effective for income incurred from the taxation period where Feb.
22, 2008 is included
3. Additional deduction extended for newly born or

adopted child
(Article 51(1) of the Income Tax Act)
◦ The new law aimed at reducing taxpayers' liabilities in the

current year when babies are born so that they have to spend
money regarding childbirth, caring after birth and the preparation
of child caring.
◦ The law also intends to improve the public's awareness toward

adoption by providing tax support for child adoption.
2. Changes
Before Now
<New> ◦ Under the new law
- A taxpayer will receive additional

deduction of 2 million won per
child who is born or adopted in
the current year.
◦ Effective for birth․adoption reported on and after Jan. 1, 2008

8 W hat are M ajor changes for 2009?
4. A Handicapped person's handicapped spouse

also eligible for basic deduction
◦ To expand tax support to the households of the handicapped
2. Changes
Before Now
<New> ◦ Under the revised law,
- The handicapped spouse of a

handicapped person who is a
linear descendant of the
taxpayer is eligible for basic
deduction.
◦ Effective for income incurred on and after Jan. 1, 2008

5. Global income tax base adjusted
(Article 55 of the Income Tax Act)
◦ The benchmark amount of the tax base is adjusted upward given

the potential rise of the inflation rate and to reduce the burden of
tax liabilities on people in the middle and lower income bracket.
2. Changes
Before Now
tax base rate tax base rate

up to 10 million won 8% up to 12 million won 8%
over 10 million won~up to 40
17% over 12 million won~up to 46
million won 17%
million won
over 40 million won~up to 80
26% over 46 million won~up to 88
million won 26%
million won
over 80 million won 35%
over 88 million won 35%

10 W hat a re M ajor cha nge s for 2009?
6. Tax support expanded for bookkeeping taxpayers
(Article 56-2(1) of the Income Tax Act)
◦ Tax credit scope for bookkeeping is revised upward to improve

the transparency of taxpayers' tax sources, and the revised
version will be applied to taxpayers subject to simplified
bookkeeping when they use a double bookkeeping system.
2. Changes
Before Now
◦ Tax credit for bookkeeping ◦ Tax credit for bookkeeping
․ Double bookkeeping: 15% of the ․ Double bookkeeping : 20% of the

calculated tax amount calculated tax amount

Individual Incom e T ax a nd B ene fit G uide for Foreigners 2009 11
7. Non-resident entertainers and etc. exempt from

obligation of final return
◦ When the payers withhold taxes at the money they paid to

non-taxable foreign entertainment & sports corporations for
services provided by non-resident entertainers and etc. who the
corporations employed
- the entertainers and etc. will be exempt from the obligation of final return
since the right of taxation is secured just as in the case when the tax
association withholds taxes on class B wage & salary income.
2. Changes
Before Now
◦In the case when the ◦ In the case when the final return of tax base is not
final return of tax base required
is not required - when the payers withhold taxes at the money they
<Newly Added> paid to non-taxable foreign entertainment & sports
corporations for services provided by non-resident
entertainers and etc. who the corporations employed
※ Non-taxable foreign entertainment & sports

corporation
- Corporations providing public performance of
entertainers & sportsmen and exempt from tax
according to a tax treaty since they have no
permanent establishment
◦ Effective for income tax paid according to the withholding regime

on and after Jan. 1, 2008
8. Due date extended for the payment of income

tax installment
(Article 77 of the Income Tax Act)
◦ To make it easier for taxpayers to pay taxes by extending the

due date for the payment of tax installment
- Previously, day was used as a unit to calculate the due date of the
installment payment. So taxpayers had to go to trouble counting the
due date of 45 days and might have miscalculated the date sometimes.
2. Changes
Before Now
◦ Installment payment regime ◦ Extension of installment due

date
- Due date - Due date extended

: 45 days after the time limit for : 2 months after the time limit
tax payment for tax payment
◦ Effective for tax returns filed and taxes paid on and after Jan. 1, 2009
9. Penalty tax regime improved regarding business

purpose bank account
◦ To prevent such cases as when penalty taxes for not opening a

business purpose bank account are smaller than penalty taxes for
not using one
2. Changes
Before Now
◦ Penalty tax regime regarding

business purpose bank account
- When penalty taxes for not
opening a business purpose
bank account is smaller than
those for not using one, the
latter is applied*.
* Max(penalties for not opening

an account, penalties for not
using one)
◦ Effective for the taxation period that Jan. 1 of 2008 attributes to

10. Simplified methods implemented for calculating

tax amount of compliant SMEs
(Article 87-2 or 87-7 of the Income Tax Act, Article 150-2 or 150-10 of the
Enforcement Decree of the Income Tax Act)
◦ To improve taxpayer convenience by simplifying and standardizing

the methods of computing tax amount for the small and
medium-sized enterprises whose revenue income amounts to a certain
level or less and who use double bookkeeping regime to record their
transactions in a compliant manner
2. Changes
Before Now
<New> ◦ If an SME submits an application form of using simplified

methods for calculating tax amount to the head of a
competent district tax office within 2 months from the end
date of the taxation period and gets an approval, the qualified
SME can use the simplified methods to calculate the tax base
and tax amount for global income of the taxation period and
report and pay the calculated tax amount.
◦ Special tax treatment in calculating tax base
- Simplified calculation of depreciation expense: depreciating

only with fixed amount method and applying 5 years of
durable years (20 years for buildings)
- Contribution limit : 1% of revenue. The excess is not eligible

for carried forward tax credit.
- Entertainment expense limit: 19 million won

Before Now
- Accumulative limit of allowance for retirement: 20% of the

total wage and salary income of a worker
- Income deduction under the Restriction of Special Taxation

Act is not applied here.
◦ Special tax treatment for tax credits
- Standard tax credits: providing tax credits of 25% of

calculated tax amount to taxpayers running businesses
eligible for the special tax reduction and exemption for
SMEs (15% for taxpayers in the metropolitan area)
- Tax credits for increased revenue : providing tax credits for

the revenue that exceeds 115% of the income year on year
- Tax credits and tax reduction & exemption under the

Restriction of the Special Taxation Act are not applied
here. If there are some tax credits carried forward to the
next year before a taxpayer got an approval to use
simplified tax calculation methods, the carried forward tax
credits are deemed as terminated.
◦ Effective for the taxation period that Jan. 1 of 2008 attributes to

11. Clarification of taxes imposed on personal service

income
◦ In case taxpayers choose to report and pay taxes on global

income that includes the income of personal service,
- To prevent the avoidance of tax payment by taking advantage of the fact that
personal service income is not withheld.
2. Changes
Before Now
◦ Taxes imposed on personal service The withholding agent should withhold taxes
income of non-resident who does not by prepaying even if the service provider
have a domestic business place would choose to file his/her income of
personal service by global income tax return
- When reporting & paying taxes on global
income that includes personal service
income, withholding agents should
withhold taxes at the personal service
income.
* The amount withheld is deducted as
prepaid tax.
◦ Effective from the business year after Jan. 1, 2008 when personal
service income is paid
12. Deduction limit revised upward for payment

records preparation
(Article 104-2(2) of the Restriction of Special Taxation Act)
◦ To reflect the actual cost of preparing and submitting payment

records and etc. of the earned income of daily workers and etc.
while increasing the deduction limit.
2. Changes
Before Now
․ For payment records of daily

workers' earned income, 300 won
per record is deducted from tax
amount.
- Annual deduction limit: 1 million - Annual deduction limit: revised upward

won to 2 million won
․ Accounting corporation: 3 million ․ Accounting corporation : 3 million
won per year won per year
◦ Effective for payment records submitted on and after Feb. 22, 2008
13. Minimum amount for the issuance of cash

receipt removed & tax deduction applied to the
issuance of cash receipts for under 5,000 won
(Article 81(11) of the Income Tax Act, Article 210-3 of the Enforcement Decree of
the Income Tax Act, Article 126-3(2) of the Restriction of Special Taxation Act)
◦ To abolish minimum amount for the issuance of cash receipts to

improve the transparency of tax sources of small cash market
◦ To reduce small and self-employed businesses' tax burden which
has been generated by the abolishment of minimum amount for
issuing cash receipts
2. Changes
Before Now
- Minimum amount for cash receipt issuance has been

<New>
abolished.
․ However, the minimum amount for penalties and monetary
reward remains as 5,000 won.
◦ Tax deduction is provided for each cash receipt

issued for 5,000 won or less.
- Eligibility: registered stores (individual business owners)
using telephone network when issuing cash receipts
- Standard: No. of cash receipts issued for the transaction
amount of less than 5,000 won
- Deduction method: 20 won is deducted from tax amount
due for each cash receipt issuance (calculated tax amount
is the limit for tax deduction).
- Application: The law expires in Dec. 2010.
◦ Effective for cash receipts issued on and after Jul. 1, 2008
14. Methods of income deduction improved for

money spent with credit cards and etc.
(Article 126-2(1) of the Restriction of Special Taxation Act)
◦ Since the amount of money spent with credit cards rises and an
increasing number of people asks for cash receipts for the amount
they spent with cash,
2. Changes
Before Now
◦ Income deduction for the money ◦ Deduction threshold and rate

spent with credit cards and etc. increased
- Deducted amount: 15% deduction - Deducted amount: 20% deduction

from the amount in excess of from the amount in excess of 20%
15% of the total wage and salary of the total wage and salary
- Expiry date: Nov. 30, 2007 - Expiry date : Dec. 31, 2009
◦ Effective from the taxation year that includes Jan. 1, 2008 when
deducted tax is calculated for the money spent with credit cards
and etc.
* The deduction period is changed for medical expenses and credit card
payment during the taxation period for 2008. Therefore, the amount spent
with credit cards and etc. from Dec. 1, 2007 to Dec. 31, 2008 will be
deductible.
15. Tax payment using credit cards
(Article 46-2 of the Framework Act on National Taxes, Article 26-2 of the
Enforcement Decree of the Framework Act on National Taxes)
◦ To provide more taxpayer-friendly service by allowing taxpayers

to pay taxes such as VAT with credit cards
2. Changes
Before Now
□ National tax allowed to be paid by credit cards through KFTC (Korea

Financial Telecommunications and Clearing Institute)
<New> ○ Payment approval date of KFTC, a tax payment agency, considered as
payment date
○ Eligible tax items: VAT, individual income tax, comprehensive real
estate tax, individual consumption tax and liquor tax paid by individual
taxpayers
- Sur-tax such as education tax and special tax for rural development is
included.
○ Maximum limit: 2million won per payment made for each tax item
- For tax notified: to 2million won or less
- For tax filed*: to 2million won
* Individuals' withholding tax paid is included.
□ How to pay tax with credit cards : through KFTC, a tax payment agency
- Credit card fees (around the range of 1%) are to be paid by
taxpayers
◦ Effective for taxes filed and notified on and after Oct. 1, 2008
Part Ⅰ
In t r o d u c t io n
At your Service
A. What if you need help ?
This booklet is intended to help you prepare your own income tax return by providing the
summary of the Income Tax Act, the instructions for filling out forms and related
schedules. If you need more help after reading this guide, you can contact us (see later
on this page).
B. Before you contact us
We hope to provide you with the best service possible. Before contacting us, please make
sure that you :
󰠅 read the appropriate sections of this guide and other publications we mention in this guide;
󰠅 prepare all the details of your situation and question; and
󰠅 have on hand the working copy of your return, any related papers or receipts, and
your tax registration number or alien registration number, if any.
C. Contacting us
Our telephone numbers and the addresses of your district tax office are listed later on this
guide.
󰠅 Website : www.nts.go.kr/eng
󰠅 Phone : (02) 397-1440 (1456～1458)
󰠅 Visit : Monday to Friday from 9:00 am. to 6:00 pm.
󰠅 Fax : You can send us correspondence by facsimile. However, because of the nature of
facsimile services, we are not responsible for misdirected, incomplete, or illegible
documents. The fax number is (02) 720-4105.
24 P a rt Ⅰ . Introduction
D. Your opinion matters !
We review our publications every year. If you have any comments or suggestions that
would help us improve them including this guide, we would like to hear from you. Please
send your comments on our publications to our English website(www.nts.go.kr/eng).
General Information
A. Do you have to file a return ?
If you are a foreign resident in Korea, you have to file a tax return in the same way as
a Korean resident does. Three major types of individual income consisting of global
income, retirement income and capital gains are all taxable.
Furthermore, if you maintain a business place (usually termed as a “permanent

establishment” in tax conventions) in Korea or have only real estate income arising from
Korean sources without maintaining PE, you must also file a tax return even though your
status is considered to be a non-resident.
☞ Exceptions to Final Return on Tax Base

Any resident falling under any of the following subparagraph, may not need to make
any final return on the tax base on income :
• A resident having only wage & salary income
• A resident having only retirement income
• A resident having only wage & salary and retirement income
• A person who has only business income, which is subject to withholding tax
pursuant to the provisions of the Income Tax Act.
• A resident having both wage & salary, and passive income such as interest,
dividend, or other income, which is subject to separate taxation
• A person who has interest, dividend, or other income only, which is subject to
separate taxation
◈ Regarding the Year-end Adjustment for Wage Income Earner, refer to the 'Easy
Guide for Foreigners' Year-end Tax Settlement' on our English website.
B. What date is your return for 2008 due ?
The regular return period for the income accruing for the tax year concerned begins on
May 1 and ends on May 31 of the next year. For tax purposes, individual tax payers
must use the calender year as their taxable year. When the due date for filing a return
and paying tax falls on a Sunday or a legal holiday, the next business day is the due date.
C. What do you include with your return and what records do

you keep ?
▶ Which Form to file
There are 2 forms you can choose when you file your final tax return : Form 40-1 and
Form 40-4. You should use Form 40-4 if you have only either business income or real
estate income. For details, refer to the information on the first page of Form 40(4), or
Form 40-1
▶ What Supporting Documents are Needed
If you are filing a return, your return forms and its guide explanations will tell you what
supporting documents are to be attached, such as certificates, forms, schedules, or official
receipts. If you make a claim without the required receipt, certificate, schedule, or form,
we may disallow your claim. It could also delay the processing of your return.
Even if you do not have to attach certain supporting documents to your return, keep them
in case we select your return for review. Generally, you should keep your supporting
documents for five years.
The following documents should accompany your tax return:

- Copy of alien registration card issued by the local immigration office, if necessary;
- Application for tax credits and exemptions, if any, and documents attesting that you are
entitled to the income deductions and tax credit, etc.;
- Documents which are necessary for calculating the total gross income amount and the
necessary expenses including balance sheet, income statement, and trial balance if you
are engaged in trade and business ;
- Other necessary documents may be requested by the tax authority according to the
relevant provision of the Income Tax Act.
☞ Alien Registration Requirement

An alien who is planning to stay in Korea for more than 90 days is required to
obtain a Certificate of Alien Registration from the Immigration Office. The Alien
Registration Number is given by the immigration office. It is important to use this
number on each and every tax-related document because it is also used as the alien's
identification number for tax purposes during his or her stay in Korea.
D. Where do you have to file and pay ?
▶ Where to file your return
You have to file your return with the district tax office (DTO) having jurisdiction over
your domicile. For your inquiry and reference, our tax offices in major cities are listed on
Appendix B (However, for your convenience in terms of English language, we recommend
you to use the contact number of the page 15 of this guide). If you live in a local
county or city, you may first contact the regional tax office to find out the location of
your relevant DTO. However, your tax return filed in an unqualified DTO will be
automatically transferred to the relevant DTO that has jurisdiction over your current
domicile. You may also file electronically, through our website(www.hometax.go.kr)
※ Home Tax Service is available only in Korean.
▶ Where to pay your tax
Taxes can be paid at any bank or post office by May 31. You may also use the electronic
payment system by phone (phone banking : ARS) or on-line banking
E. What penalties do we charge ?
The penalty for both failure-to-return and failure-to-pay is assessed if a return or a payment
is not accomplished by the due date. For details, refer to Part Ⅱ. Tax Penalties(page 74).
F. What happens to your return after we receive it ?
When we receive your return, we usually review it based on the information you
provided. We may select your return for a more detailed review before we assess it. We
may ask you to give us documents to verify the deductions or credits you claimed.
G. When can you expect your refund ?
We usually process returns in 4 to 8 weeks. Normally returns are processed during June.
H. Do you report foreign income and other amounts ?
If you are a foreign resident in Korea, you have to report your income from all sources,
both inside and outside Korea. Report foreign income and other amounts (such as
expenses and taxes paid) in Korean won. Use the exchange rate that was in effect on the
day you received the income or paid the expense.
If you paid foreign taxes on foreign income you received, do not reduce the amount you
report by the amount of tax the foreign country withheld. However, you may be able to
claim a foreign tax credit when you calculate your tax responsibility. This credit is for
foreign income or profits taxes you paid on income you received from outside Korea and
reported on your Korean return. Tax treaties with other countries may affect whether you
are eligible for this credit.
I. What is the "Enforcement of Standard․Simplified Expense Rate System"?
▶ Concept
• This is a presumptive deduction, i.e. a deduction given for tax purposes regardless of (and in
lieu of) the actual expenses incurred. Taxable income is calculated by deducting a
presumptive expense ratio (So-called Standard or Simplified Expense Rate in Korea) from
gross receipts. Since the deduction is given against gross income, the effect is the same as
making a presumption of taxable profit.
• Standard Expense Rate System is in effect for the income accruing after January 1,
2002 so as to establish taxation based on bookkeeping(e.g. accounts of taxpayers) and
to guarantee transparency of transactions through evidential documents.
• Generally, taxpayers who have gross revenue above a certain amount shall file their
tax returns based on their bookkeeping (including double-entry bookkeeping). However,
even those taxpayers may file their returns, without bookkeeping, through evidential
documents alone for their expenses under Standard Expense Rate system. A taxpayer
who are subject to this system has to show the amount of their Primary
Expenses(purchase, rental and wage expenses) through the relevant evidence
documents. Then, the rest of the expenses, for the purpose of individual income tax,
shall be determined as the amount calculated according to Standard Expense Rate.
Income Amount = Gross Revenue - Primary Expenses - (Gross Revenue × Standard Expense Rate)
※ However, in order to help taxpayers avoid drastic increase of their tax burden, the ceiling
of income amount is applied as follows :
Income Amount (according to ≤ ｛Gross Revenue - (Gross Revenue × Simplified Expense Rate)｝
standard expense rate) × Ratio decided by NTS (2.1 or 2.6 for year 2008)
※ Ratio is apply to businesses which do not keep records and books as follows :
(2.1 : business subject to simplified bookkeeping, 2.6 : business subject to double entry bookkeeping)
• On the other hand, small size taxpayers shall be eligible for Simplified Expense Rate for the
income accruing for the year of 2008, the rate will be increased to the level of actual expense
rate in the future.
Income Amount = Gross Revenue - (Gross Revenue × Simplified Expense Rate)
▶ Scope of Standard․Simplified Expense Rate System
• Taxpayers subject to Standard Expense Rate
1) taxpayers which do not keep records and books and are not subject to simplified
expense rate*
2) taxpayers with the sum of gross revenue of preceding year not less than the amount
below who does not maintain books on records
ⅰ. Agriculture, Hunting & Forestry, Fishing, Minning, Wholesale and Retail Trade, and
other types of business which do not fall under following categories : 60 million won
ⅱ. Manufacturing, Hotels and Restaurants, Electronics․Gas and Water-supply, Construction,

Transport, Storage & Communications, Finance & Insurance : 36 million won
ⅲ. Real Estate, Service(Personal Service) : 24 million won
* Taxpayers not subject to simplified expense rate

･ Professional occupation (lawyer, tax accountant, accountant, customs broker, doctor,
pharmacist, veterinarian etc.)
･ An individual business which is required but failed to register as a cash receipt
issuance store during the required subscription period (3 months)
･ A taxpayer regularly refusing to issue credit card sales slips․cash receipts
(amounting to 1 million won or more for 3 times per year, or for 5 times per year)
• Taxpayers subject to Simplified Expense Rate
󰠅 Taxpayers with the gross revenue of preceding year less than the amount above and
new starter during current year.
▶ Notes
• For the purchase and rental expenses to be allowed as necessary expenses by the tax
authority, taxpayers shall receive regular evidential document such as a tax invoice,
invoices and credit card sales slip. When a taxpayer receives simplified tax invoices
or receipts, he/she has to submit to the tax authority the Details of Primary Expenses.
along with them.
Regarding the scope of primary expenses, the types of evidence document and the amounts
(not) included in Details of Primary Expenses, please refer to National Tax Service
Notice 2003-36(2003.12.24) “Notice of Scope of Purchase․Rental Expense and Types of
Evidence Document".
• It should be also noted that when a taxpayer with the gross revenue of the preceding
year not less than 48 million won files his/her return by estimation according to
Standard(Simplified) Expense Rate shall be subject to penalty for non-bookkeeping,
20% of the calculated tax amount
▶ Special Case Applicable to the Personal Service Income Earners
Introduction of the Excess Rate to the Simplified Expense Rate for the Personal
Service Income Earners.
• In case of personal service income earners applying the Simplified Expense Rate,
Excess Rate is applied to amounts exceeding won 40 million.
󰠅 Since personal service income earners do not require separate human resources or
physical facilities, their income structure is similar to that of a salary income.
󰠅 Therefore the Excess Rate has been introduced to account for the inequality in terms of
tax burden between personal service income earners and salary income earners who has
much higher rate of taxable income to salary revenue as the salary revenue increases.
※ However, in case of business person who started personal service business on the
previous year, the taxable income amount is calculated by annualizing the actual
revenue amount during the business period by dividing the amount by 12 and
multiplying it by the number of months the business has existed, since the actual
time the business has been operating is less than one year (the number of month is
calculated based on calendar month and the month which is short of a full month
is still counted as a full month).
☞ An example of the application of the Excess Rate
Simplified
Business Revenue Amount Expense Rate
Category Classification (Business Person
going concern) Basic Excess
Rate Rate
Lecturer Subject to 50,000
(940903) Simplified Thousand won 59.7% 43.6 %
Expense Rate
▶ Taxable Income =［40,000-(40,000×59.7%)］+［10,000-(10,000×43.6%)］
= won 21,760 Thousand
J. Frequently Asked Questions
[Taxation on gains from stock option exercise]
Q1. I work for a foreign-invested company. I have profits from stock options that I
exercised in 2008 which were granted by a foreign parent three years ago.
Should I declare the gains?
A1. Yes. If an employee of a domestic subsidiary is granted stock options by a

foreign parent, and exercises them during the employment, the profits are
regarded as compensation for the labor the employee provides. Therefore, you
should declare the profits during the global income tax filing season this year.
You should write down the profits on page 11(❽ Details of Wage & salary
Income and Other Income) of tax form 40(1). Enter 56 on the ① Income
Classification Code.
For your reference, the profits generated by exercising stock options after
retirement should be reported as other income. Enter 60 on the ① Income
Classification Code of the same tax form 40(1).
[Currency Conversion of Wage and Salary Paid in Foreign Currency]
Q2. I have been working in Korea since early last year. I receive my wage and
salary from the US head office on the 20th of every month. I would like to file
a tax return on the income. I wonder how I should declare my wage and salary
paid in the foreign currency?
A2. If wage and salary is paid in the foreign currency, the currency should be
converted into won as follows:
If you are paid wage and salary before the agreed date of payment, you should
apply the standard exchange rate of the actual payment date. If you are paid
wage and salary on or after the agreed date of payment, you should apply the
standard exchange rate of the agreed date of payment.
[Special Case of Final Return on Tax Base]
Q3. I am a foreigner, and have run my own business for a couple of years in Korea.
I am returning to my home country in April this year. Should I declare my
global income tax for 2008 in May this year? And how may I go about filing a
tax return on income earned in 2009?
A3. If a foreigner subject to the global income tax leaves Korea, he/she should file a tax
return not later than 10 days before departure. In your case, you should declare your
income earned attributable to 2008 and until the day of your departure in 2009 not
later than 10 days from the date of departure.
[Income Tax Liabilities and Filing of Tax Base for Global Income]
Q4. I have worked in Korea for three years. I have real estate rental income from
my home country. I already settled my wage and salary earned in Korea during
the year-end tax adjustment period. Should I declare the real estate rental income
in Korea as well?
A4. Yes. Since you have lived in Korea for more than one year, you have tax
liabilities on wage and salary earned in Korea as well as any income earned
abroad. You will be granted tax deduction for the taxes paid aborad when filing
a global income tax.
[Basic Deduction]
Q5. My parents live back home in my home country. Are they eligible for basic
deductions?
A5. Yes, you may receive basic deductions for your parents living in your home
country, as long as they are your dependents and their adjusted wage and salary
does not exceed ￦1,000,000 per year.
You may receive an additional deduction of ￦1,000,000 per parent aged 65 or older,
and ￦1,500,000 per parent aged 70 or older.
Part Ⅱ
Ou t lin e o f In d iv id u al
In c o m e Tax S ys t e m
In this part, the provisions of the Income Tax Act are outlined.
※ Refer to the Income Tax Act for detailed information.
Taxpayer
Taxpayer, who is liable to pay the income tax on his/her income, is classified into
Resident and Non-resident in terms of whether Korea has the taxing right on his/her
worldwide or just domestic income, and the scope of income deduction pursuant to the
provisions of Income Tax Act of Korea.
A. Resident
Principally, a resident is any individual who has his/her domicile in Korea or a place of
residence for 1 year or more in Korea. The domicile shall be judged by the objective
facts of living relationship, such as the existence of a family living together in Korea and
of the property located in Korea. The 'place of residence' means the place where a person
has dwelt for a long time besides his address.
A taxpayer who falls under the following cases is deemed to have a domicile in Korea.
󰠅 Who has an occupation which would require him/her to reside in Korea for 1 year or
more; or
󰠅 Who has his/her family in Korea and is likely to reside in Korea for 1 year or more in
view of his/her occupation or assets held in Korea.
A resident is subject to income tax on all incomes derived from sources both within and
outside the country.
B. Non-Resident
Any individual other than a resident is a non-resident, who is liable to income tax only
on the income derived from sources within Korea.
36 P a rt Ⅱ . O utline of Individual Incom e T ax S ystem
Income
A. Taxable Income
As stated above, resident individuals are taxed on their worldwide income. Non-resident
individuals are taxed only on Korean-source income.
Regarding taxation method, income derived by residents and non-residents is subject to

global and separate taxation.
- Under global taxation, interest, dividend, real estate rental income, business income,
wages and salaries, pension income, and other income are aggregated and taxed
progressively.
- Under separate taxation, however, retirement income and capital gains are taxed
separately at varying tax rates.
[Income Tax Liabilities and Filing of Tax Base for Global Income]
Q. I have worked in Korea for three years. I have real estate rental income from my
home country. I already settled my wage and salary earned in Korea during the
year-end tax adjustment period. Should I declare the real estate rental income in
Korea as well?
A. Yes. Since you have lived in Korea for more than one year, you have tax
liabilities on wage and salary earned in Korea as well as any income earned
abroad. You will be granted tax deduction for the taxes paid aborad when filing a
global income tax.
▶ Global income
Global income is the income which is subject to global taxation and includes interest,
dividend (including deemed dividend), real estate rental income, business income, wage and
salary, pension income and other income.
Interest
- Interest and discount amounts received during a tax year from debentures and securities issued by
a nation’s government/its local authorities, or a domestic/foreign corporation
- Interest and discount amounts received during a tax year from deposits and installment
savings payable both within and outside Korea
- Interest from non-commercial loans
- Savings-type insurance premiums with a maturity of less than ten years
Dividends
- Dividends, distributions of surplus, and interest received from a domestic or foreign

corporation during construction
- Distributions of profits received from a non-corporate entity such as private associations
or foundations
- Deemed dividends and distributions
- Amounts designated as dividend by the Corporation Tax Act
- Distributions of profits arising from securities investment trusts, except for profits or
losses arising from the transfer or revaluation of securities listed on the Korean Stock
Market or the Korean over-the-counter trading market (KOSDAQ)
Real estate rental income
- Income from leasing land, from fixtures thereon, and rights pertaining thereto
- Income from leasing mining and factory foundations or from mining rights
Business income
- Profits from livestock, forestry and fishing industries

- Profits from mining and quarrying
- Profits from manufacturing
- Profits from provision of electricity, gas, and water services
- Profits from construction business
- Profits from wholesale or retail trade, operation of a hotel, or catering
- Profits from transporting or communications
- Profits from banking, insurance, and real estate dealing
- Profits from real estate business, leasing, and business services
- Profits from educational services
- Profits from health and social welfare services

- Profits from social and personal services
- Profits from household services
Wage and salary income
- Class A:
․ Wage, salary, remuneration, allowance, bonus, and any other allowance of a similar
nature received in return for services
․ Income, other than retirement income, received due to retirement
- Class B:
․ Wages and salaries received from a foreign agency or from the U.N. Forces in Korea
(excluding the U.S. Armed Forces)
․ Wages and salaries received from a foreigner or foreign corporation outside Korea,
excluding those claimed as a deductible expense for a Korean place of business of a
non-resident or a foreign corporation
[Taxation on gains from stock option exercise]
Q. I work for a foreign-invested company. I have profits from stock options that I
exercised in 2008 which were granted by a foreign parent three years ago. Should
I declare the gains?
A. Yes. If an employee of a domestic subsidiary is granted stock options by a

foreign parent, and exercises them during the employment, the profits are regarded
as compensation for the labor the employee provides. Therefore, you should declare
the profits during the global income tax filing season this year. You should write
down the profits on page 11(❽ Details of Wage & salary Income and Other
Income) of tax form 40(1). Enter 56 on the ① Income Classification Code.
For your reference, the profits generated by exercising stock options after
retirement should be reported as other income. Enter 60 on the ① Income
Classification Code of the same tax form 40(1).
Pension income
- national pension
- public official pension
- retirement pension
- private pension, as set out in the Restriction of Special Taxation Act
- incomes similar to those above, which are paid in the form of annuities.
Other income
The term "other income" denotes specifically designated categories of income other than
interest, dividends, real estate rental income, business income, wages and salaries,
pension income, retirement income and capital gains. Other income includes the
following:
- prize money and other similar money or goods,

- money or goods received from participation in a lottery, and any other prize won in a
contest,
- money or goods received as a prize in a lottery, drawing, or any other contest,
including the purse payable to the buyer of a winning ticket for horse racing, cycle
racing, motorboat racing, bull fighting and sports betting game,
- fees for use of copyrighted materials received by any person other than the creator of
the material,
- royalties given as consideration of using films or tapes for radio or television
broadcasting, or from such use of other similar assets or rights,
- gains from the alienation of mining rights, fishing rights, industrial property rights,
individual information, industrial secrets, trademarks, goodwill(including certain leases
of stores), rights derived from the permission to exploit earth, sand, and stone, the
right to exploit and use subterranean water, etc.
- rent derived from a temporary lease of real estate or personal property, goods, or
places, and
- damages or indemnity payments for breach or cancellation of a contract.
▶ Non-global income (Classified income)
Non-global income denotes the income which is separately taxed from the global income
at varying rates. It includes Retirement income and Capital gains.
Retirement income
- Class A: Retirement allowances: retirement allowance from the reserve of the National
Pension Fund received by a Class A wage and salary income earner
- Class B: Retirement allowance received by a Class B wage and salary income earner
Capital gains
- Income arising from the transfer of land or buildings

- Income arising from the transfer of rights related to real estate
- Income arising from transfer of shares in a company listed on the Korean stock
exchange and the KOSDAQ (Korean Securities Dealers Automated Quotation) sold by
large shareholder and sold not via securities markets.
* the scope of large shareholder : ① or ②

① Shareholder or investor and his/her related persons whose combined shares are
3%(5% in the case of share listed on the KOSDAQ market) or more of the total
shares as of the end of the previous fiscal year of the year in which transfer of
shares take place.
② Shareholder or investor and his/her related persons whose combined market price of
shares are 10 billion won(5 billion won in the case of shares on the KOSDAQ
market) or more as of the end of the previous fiscal year of the year in which
transfer of shares take place.
- Income arising from transfer of shares in a company not listed on the Korean stock
exchange and the KOSDAQ
* Gains realized by an individual taxpayer on the transfer of shares in a company listed

on the Korean stock exchange and the KOSDAQ (excluding those traded at
over-the-counter market) are not taxable.
B. Non-taxable Income
Non-taxable income is the income for which the Government waives its taxing rights.
Whether an application for non-taxation is made or not, this kind of income is not
taxable. A few examples for each income are addressed as follows.
▶ Income dedicated to public goods
Profits from property placed in trusts for public welfare
▶ Rents from certain categories of real estate
Income from the lease of rice fields or dry fields etc.

▶ Interest and dividend income
- Interest or dividends from long term home savings; over seven years and less than 3
million won per quarter
- Interest from savings of less than 20 million won, to Mutual Financial Institutions of
agricultural or fishing associations
- Interest or dividends from cost-of-living savings of less than 30 million won of the
elderly(60 years old(55 years old for female) or more) or the disabled
- Dividends from stock of up to 30 million won at par value owned for more than one
year by employees or stockholders who are minority stockholders
▶ Business income
Profits not exceeding 12 million won per year from other auxiliary businesses such as fish
breeding, straw production, and so on.
▶ Wage and salary income and retirement income
- Pay received by certain enlisted men in the armed forces, or persons mobilized under
law
- Compensation or other payments made for consolation received by those injured or

debilitated while furnishing a service
- Education fees as prescribed by §11 of the Enforcement Decree of the Income Tax Act
- Payments in the nature of reimbursement for expenses actually incurred (including such
items as overseas service allowance, housing allowance, etc, received by foreign wage
and salary earners)
- Wages received by the person working in a foreign government or an international

organization(the United Nations and its affiliated organs) as prescribed by §14 of the
Enforcement Decree of the Income Tax Act ; in case of a foreign government, the
principle of reciprocity is applied
- Wages receivable by furnishing work or services overseas: pay up to 1 million won per
month(pay up to 1.5 million won per month receivable for deep-sea fishery outbound ship
workers)
- Reimbursement expenses of those prescribed by §14 of the Enforcement Decree of the

Income Tax Act
- Allowances for night shifts, overtime work, and holiday duty received by blue-collar
employees with monthly wages not exceeding one million won
- Special Taxation Treatment for Foreign Employees : limit is up to 30% of Gross Wage
& Salary Income
․Provisions concerning such tax exemption, deduction, reduction, tax credit, and year-end
settlement shall be applicable to the non-resident same as resident.
․A foreigner may choose separate taxation of total income from employment income by
multiplying such income by 17/100 instead of non-taxable treatment on 30% of gross
wage & salary income. In this case, provisions concerning such tax exemption,
deduction, reduction, and tax credit shall not be applicable.
▶ Other income
Awards or compensation received under the National Security Law ; and so on.
▶ Capital gains
- Capital gains from disposition of real estate resulting from adjudication of bankruptcy;
- Capital gains from exchanges, division, or annexation of farmland prescribed by §153 of

the Enforcement Decree of the Income Tax Act.
- Capital gains from the transfer of one house per household, together with the land upon
which the house sits (limited to an area of ten times the floor space of the house, or
five times the floor space in a designated urban planning district): To obtain this
exemption, the house must be held by the seller for more than three years and the
house located in the Seoul Metropolitan city etc, should be inhabited by the owner for
over two years. The house also must not be "highly priced house", i.e. not worth more
than 600 million won. This exemption is extended to a second house per household in
case where a taxpayer acquires a rural house (located in areas other than Seoul or
Gyeonggi-do) by inheritance, or for the purpose of returning to a farming life, or due to
rural exodus and so on.
▶ Pension income
- Survivor's pension or disability pension received under the National Pension Act;
- Various annuities received under the Industrial accident Compensation Insurance Act etc.
C. Tax-exempt Income
▶ Wage & Salary income
In case a taxpayer has any income counted in the taxable global income as follows, an
amount calculated by multiplying the amount of calculated global income tax by the ratio
of the said income to the taxable global income is exempt from income tax upon
submitting an application for tax-exemption:
- Wages receivable by a foreigner sent to Korea under a governmental agreement from

both parties or one party;
- Income accruing from the operation of ships or aircraft engaged in international traffic
by non-residents and alien residents, provided that the reciprocity basis is applied.
A foreign engineer who falls under §16 of the Enforcement Decree of the Restriction of
Special Taxation Act shall be allowed to be exempted from income tax derived from
Korea if such employment income has been earned until the month whereto belongs the
date on which 5 years have passed since the first date on which the foreign engineer
provided his service in Korea.
▶ Capital gains
Exemption of capital gains tax for alienated farming land that has been cultivated by the
owner himself/herself for 8 years or more.
☞ Global Taxation of Financial Income (GTFI)

When the amount of interest or dividend income included in the global income tax of
a resident exceeds the amount set forth in the guideline as to global taxation (40
million won per year), the amount of tax on global income shall be the larger of the
two shown below.
(a) The sum of the following:

- The amount of global income tax calculated on the sum of:
․the amount by which interest and dividend income exceeds 40 million won, and
․the amount of global income other than interest or dividend income.
- 5.6 million won, the amount of tax calculated by applying a withholding tax rate
of 14% to 40 million won
(b) The sum of the following:

- 14% of the total interest and dividend income, and
- the amount of tax computed on global income other than interest or dividend
income.
￭ Who are subject to global taxation on financial income

• Resident
- Individual
- Non-corporate organization regarded as individual
• Non-Resident
- In the case that the GTFI is substantially related to the Permanent establishment
or real estate in Korea
￭ Taxation Period
• The Taxation period is Jan. 1st to Dec. 31
- In the case of becoming a Non-Resident due to early departure, it would be Jan.
1st to that departing day.
Tax Base and Deductions
A. Basic Rules for Calculating the Tax Base
▶ Substance over form
The provisions governing calculation of taxable income are applicable on the basis of the
real contents thereof.
▶ Classified calculation
The tax base shall be calculated for global income, retirement income and capital gains,
respectively.
▶ Global income tax base
The global income tax base is the amount remaining after deducting personal exemptions
from the aggregate of taxable global incomes such as interest income, dividend income,
real estate income, business income, wage and salary income, and other income.
▶ Non-inclusion in global income
The following incomes are not included in the global income but are either assessed
separately or are non-taxable:
- Non-taxable income
- Wage of workers paid on a daily basis
- Interest and dividend income subject to separate taxation which is eligible for reduced
withholding rates
- Excessive refund of the workplace mutual-aid association as prescribed in §14③ 3 of

the Income Tax Act
- Other income of not more than 3 million won per year as prescribed in §14③ 5 of the
Income Tax Act
- Annuity income subject to separate taxation pursuant to §14③ 6 of the Income Tax Act
▶ Tax base of income subject to separate taxation
The tax base of retirement income or capital gains is the amount remaining after
deducting personal deductions from the respective income amount (the personal deduction
may be deducted if there is any residual after deducting from global income).
▶ Taxable period for revenue and expenses
The taxable period for gross revenue and necessary expenses of a resident is the period to
which the revenue and expenses should be attributed and reported. The timing for
attribution, for each type of income, is as follows :
☞ Attribution of Income
Type of Income Timing of Attribution
Interest income the date of receiving interest or the agreed date of payment
the date on which disposition of surplus is determined

Dividend income
(ordinary dividend income)
Real estate rental income the date of receiving rent or the agreed date of payment
- the date of delivery or of the product reaching the deliverable

Business income state(Sales of merchandise or products)
- the date of completion of services(Performance of personal services)
Wage and salary income the date of furnishing services(ordinary wage and salary)
Retirement income the date of retirement
Capital gains the date paid in full
Other income the date of receipt

▶ Taxable period
- Generally individual taxpayers use the calendar year as tax year : January 1 through
December 31
- January 1 through the date of death, in the case of death of a resident
- January 1 through the date of leaving Korea, in the case of a resident who becomes a
non-resident
B. Calculation of Tax Base(Taxable Income)
▶ Interest income
Amount of income
▶ Dividend income
Actual dividend and distribution : Amount of income
Deemed dividend
- The amount in excess of the investment received by an investor through decreasing the
capital of a corporation
- The value of stock dividends or any other corporate rights received by stockholders or
investors by capitalizing corporate surplus except for capital reserves or reserves for
assets revaluation, and so on
▶ Real estate rental income
Taxable income
- Total amount of income in each taxable period remaining after deduction of necessary
expenses and losses carried over within 5 years from gross revenue
Gross revenue
- Aggregate of revenue accruing from lease of real estate
- If key money or deposit is received as a rent, the amount calculated by multiplying the
key money or deposit exceeding the construction expenses of the rental estate by the
interest rate for a time period maturing in one year as of the closing date of the taxable
period adds to the gross receipts.
Necessary expenses
- Aggregate of expenses required to produce the total amount of income earned during the
taxable period
- If the tax base is determined on the basis of estimation, the standard expenses determined
by the Government are regarded as necessary expenses.
▶ Business income
Total amount of income in each taxable period remaining after deduction of necessary
expenses and losses carried over within 5 years from an amount of gross revenue.
Gross revenue
(a) Gross revenue of a business are the aggregate of money or property receivable in
connection with the activities of a business in the tax year.
ㆍIf anything other than money is received, the income amount is calculated as the
monetary value thereof prevailing at the time of transaction.
ㆍThe value of returned goods and a discount on sales is offset in the calculation of
gross revenue for the year.
ㆍSales discounts in case of early settlement of an account receivables are deducted
from gross revenue
ㆍBounties and other similar sums received from sellers are included in gross revenue.
ㆍIf tax amounts counted in necessary expenses are refunded, the amount of refund is
included in gross revenue.
ㆍA decreased amount of liabilities due to exemption or the lapse of a liability is
accounted for as gross revenue.
ㆍSuch other amounts of revenue related to the business as have been reverted or are
to be reverted to the business person in question are counted in gross revenue.
(b) Non-inclusion in gross revenue
The following items are not covered in gross revenue:

ㆍamount of income tax or inhabitant tax refunded or to be refunded, used for the
payment of other tax amounts
ㆍvalue of assets received without compensation and amount of decrease in liabilities due to
exemption or lapse of debts, used for balancing carried-over deficits,
ㆍvalue of products used by businesses: self-produced raw materials or fuels,
ㆍamount of indirect taxes, such as the Value Added Tax, collected from customers to
be turned over to the tax authorities, and
ㆍinterest on the refund of overpayments of national taxes or local taxes.
Necessary expenses
(a) Necessary expenses are the aggregate of expenses incurred in relation to the accrual
of gross revenue for each taxable period and include the following:
ㆍpurchase price of raw materials or goods corresponding to products or goods sold for
the year concerned (discounts on purchases and purchase discounts are deducted from
purchase price)
ㆍbook value of transferred assets at the time of the transaction (in the case of a real
estate sales business)
ㆍsalaries and wages
ㆍcost of repairing business assets, including management and maintenance expenses
ㆍdepreciation of fixed assets of the business
ㆍrent of business assets
ㆍinterest on borrowings
ㆍbad debts (including VAT thereon)
ㆍloss on revaluation of assets
ㆍmine exploration expenses including development costs
ㆍadvertisement expenses and sales promotion expenses
ㆍpublic contributions, designated donations and entertainment expenses within the
prescribed limit
ㆍdeferred expenses such as start-up costs or experimental and research expenses
counted in necessary expenses
(b) Contributions to the following reserves are considered necessary expenses, within the
prescribed limits.
ㆍReserves for retirement of up to 5% of total wages paid to employees who have

served for one year or more: the accumulated amount of the reserve is limited to
30% of the estimated retirement allowances payable to all employees at the closing
date of the year
ㆍReserves for bad debts to be included in the necessary expenses shall be the larger
amount between the amount equivalent to 1% of aggregate sales on credit or accounts
receivable and related claims as of the closing date of the respective year, and the
amount obtained by multiplying the credit balance by the actual ratio of bad debt.
(c) The following amounts are treated as necessary expenses in the calculation of income
for the year.
ㆍGains on insurance claims of a resident used for acquisition of the same kinds of
fixed assets as the lost or broken fixed assets, and those used for improvement of the
acquired fixed assets or the damaged fixed assets (must be within 2 years from the
beginning day or the year following the year in which the gains fall)
ㆍAmount of subsidy actually used for acquisition or improvement of fixed assets
(d) Non-inclusion of necessary expenses
The following losses and expenses are not counted as necessary expenses in the
calculation of the income of a resident.
ㆍIncome tax (including foreign income taxes), inhabitant tax, and tax paid or payable
as a result of delinquency in the payment of tax owed (including penalty taxes
thereof)
ㆍFines, minor fines, penalty taxes, and expenses for disposition of taxes in arrears
ㆍPublic imposts, other than those which a taxpayer has an obligation to pay under the law
ㆍLosses from revaluation of assets other than inventory or short-term investment assets
ㆍExpenses deemed by the government not to have any direct connection to the
business
ㆍUnpaid amounts of liquor tax or other excise taxes on inspected or carried out
products not yet sold
ㆍInterest on borrowing incurred by a resident and used to fund construction, and
interest on private loans of which the sources are unknown
ㆍDepreciation amount of the fixed assets allocated for each year, exceeding the amount
allowed as necessary expenses
ㆍHousehold expenses and prepaid expenses

ㆍValue added tax paid on inputs
(e) Non-inclusion in necessary expenses of designated donation
If the amount of designated donations* exceeds the amounts calculated below and
donations are not designated ones, such donations are not included in necessary expenses
for the relevant year when calculating business income.
1) Donations made to religious groups
Amount limit included as necessary expenses = A※ ☓ 10% + Min[(A ☓ 5%),
donations made to organizations other than religious groups]
2) Cases not included in 1) above

Amount limit included as necessary expenses = A ☓ 15%
※ A : Income amount of the relevant year - Deficit carried over - Political donations
- Donations with no-limit deduction - Donations with 50%-limit deductions -
Donations with 30% - limit deductions made to employee stock ownership
association
* Designated Donation
ㆍDonations to public interest entities, social welfare organizations, and religious
organizations
ㆍDonations and scholarships for academic research, technical development, and athletic
skill development
ㆍOther donations to public entities prescribed by §80 of the Enforcement Decree of the
Income Tax Act
The following contributions are always treated as necessary expenses in computing taxable
income.
ㆍValue of money and goods donated to government agencies and local governmental
bodies without compensation
ㆍContributions for national defense and war relief
ㆍValue of money and goods donated for the relief of victims of calamities
(f) Non-inclusion in necessary expenses of entertainment expenses
ㆍIf a taxpayer's entertainment expenses exceed the aggregate sum of the following
amounts, the amount in excess thereof is not to be counted as a necessary expense.
(Note: Entertainment expenses are allowed only when supported by recognizable
regular invoices such as credit card invoices if the one-time expenditure is over
50,000 won.)
i) an amount calculated by multiplying 12 million won (18million won in the case of

a small or medium size enterprise) by the number of months in the respective tax
period, divided by 12
ii) an amount calculated by multiplying the total amount of revenue for the business
year by the rates listed in the table below
Revenue amount Rate
10 billion won or less 0.2%

Over 10 billion won but not more than 20 million won + 0.1% in excess of
50 billion won 10 billion won
60 million won + 0.03% in excess of
More than 50 billion won
50 billion won
(g) Provided, that with respect to the revenue accruing from the transaction of the related
party determined by §84 the Enforcement Decree of the Income Tax Act, it shall be
the amount equivalent to 20/100 of the amount calculated by the rates listed above.
Depreciation
- Depreciation cost is calculated as necessary expenses in computing income, and is
determined in accordance with the useful life of fixed assets.
(a) Methods of calculating depreciation
- Depreciation of fixed assets is calculated according to the following methods.
ㆍFixed percentage method or straight-line method for tangible fixed assets (only the
straight-line method may be used for buildings, but either method may be chosen for
machinery and equipment)
ㆍStraight-line method used for intangible fixed assets
ㆍUnit of production method or straight-line method for mining rights: Under the unit
of production method, the actual output extracted in a tax year is compared to the
estimated total amount extracted, and the ratio is applied to the book value of the
mineral rights to determine the size of the depreciation deduction allowed. (Note: the
Korean language uses one word to describe "depreciation," "amortization," and
"depletion.")
ㆍUnit of production method, fixed percentage method, or straight-line method for
tangible fixed assets used in mining
(b) Acquisition value of fixed assets
ㆍIn case of fixed assets purchased, it is the price quoted at the time of purchase
(including registration tax, acquisition tax, and other incidental costs, but not Value
Added Tax).
ㆍIn case of fixed assets acquired by means of one's own construction, fabrication, etc.,
it is the aggregate costs of raw materials, labor, freight, loading and unloading cost,
insurance premiums, fees, public imposts (including registration tax and acquisition
tax), installation expenses, and other incidental costs.
ㆍIn case of fixed assets other than those referred above, it is the normal price quoted
at the time of acquisition.
(c) Useful life and depreciation rate
- Refer to §28 of the Enforcement of the corporation tax act.
(d) Residual value
- The residual value of a fixed asset is zero, but becomes 5% of the acquisition value in
case of depreciation when using the fixed percentage method. This amount is claimed
as an expense in the final year of depreciation.
(e) Revenue expenditures and capital expenditures
ㆍRepairing expenses disbursed by a taxpayer either to restore his assets to their

original state or to maintain their efficiency are regarded as revenue expenditures.
ㆍRepairing expenditures spent either to extend the useful life or to increase the actual
value of fixed assets are regarded as capital expenditure.
Accounting for inventory

(a) A taxpayer may select one of the following methods of inventory accounting. The
accounting method utilized for filing tax returns shall be reported by the due date for
the year in which the business is begun.
ㆍCost method
ㆍLower of the cost or the market method
(b) If the cost method is applied, one of the following conventions must be used.
ㆍSpecific identification method

ㆍFirst-in, first-out ("FIFO") method
ㆍLast-in, first-out ("LIFO") method
ㆍWeighted average cost method
ㆍMoving average cost method
ㆍCost of sales rebate method
(c) Different accounting methods may be applied to various assets by category and place of
business, in accordance with the following classes of assets.
ㆍProducts and merchandise

ㆍSemi-finished goods and work in process
ㆍRaw materials
ㆍStored goods
(d) In any of the following cases, the head of a tax office may value inventory assets
according to the FIFO method (weighted average cost method in case of securities,
specific identification method in case of real estate held for sale).
ㆍA taxpayer fails to report his method of accounting for inventory within the time
required.
ㆍA taxpayer accounts for inventory using a method other than that reported.
ㆍA taxpayer changes the accounting method used for inventory without filing a report
of such change.
▶ Wage and salary income
The total amount of income remaining after the deduction of the following amount.
☞ Deduction Amount on Wage & Salary Income
Wage & Salary Amount Deduction Amount
Up to 5 million won Total amount
5 million～15 million won 5 million won + 50% of the Salary over 5 million won
15 million～30 million won 10 million won + 15% of the Salary over 15 million won
30 million～45 million won 12.25 million won + 10% of the Salary over 30 million won
Over 45 Million won 13.75 million won + 5% of the Salary over 45 million won
▶ Pension income
Total amount of income remaining after the deduction of the following amount with the
deduction ceiling of 9 million won.
☞ Deduction Amount on Pension Income
Pension Amount Deduction Amount
Up to 3.5 million won Total amount
3.5 million won

3.5 million～7 million won
+ 40% of the pension over 3.5 million won
4.9 million won
7 million～14 million won
+ 20% of the pension over 7 million won
6.3 million won
Over 14 million won
+ 10% of the pension over 14 million won
▶ Other income
Aggregate amount of income less necessary expenses. For the types of other income
enumerated in Article 87 of Presidential Decree of Income Tax Act, i.e. Remuneration
from a lecture of an independent nature and similar incomes, are given deduction of 80%
thereof as necessary expenses.
▶ Retirement income
Taxable income is calculated as follows ;
Retirement pay
+
Tax Base Honorable retirement
Income
＝ allowance － Basic deduction － Deduction by the
+ for retirement
length of service
Group retirement income
insurance proceeds
That means, the total amount of income remaining after deduction of the following
amounts
- Basic Deduction for Retirement Income

․45% of retirement pay
- Additional Deduction by the Length of Service
☞ Deduction by the length of service
No. of Service Years Deduction Amount in won
Up to 5 years 300,000 won per service year
5－10 years 1,500,000 won + 500,000 won × (No. of service years－5)
10－20 years 4,000,000 won + 800,000 won × (No. of service years－10)
Over 20 years 12,000,000 won + 1,200,000 won × (No. of service years－20)

▶ Capital gains
Income arising from the transfer of land, buildings, or rights thereon, stocks, and other
assets specifically enumerated in the Income Tax Act shall be taxed separately from global
income.
transfer amount - (1) necessary expenses

Taxable gains = - (2) special deduction for long-term holding
- (3) standard deduction for capital gains
- "Necessary expenses" includes acquisition costs, costs of installations or improvements,

and other capital expenditures.
acquisition amount + capital expenditure

(1) Necessary = + establishing and improving expenses
expenses
+ expenses for transfer
The special deduction for long-term holding of land or real estate is as follows:
(a) In the case of 1 household owning 1 house: 12% ~ 80% (the percentage increasing
as the period of house owning rises)
(b) In other cases : 10% ~ 30% (the percentage increasing as the period of house owning rises)
(2) Special deduction = (transfer amount-necessary expenses)× (a) or (b)

for long-term holding
- A capital gain deduction of 2.5 million won is given without regard to the amount.
(3) Standard deduction for

capital gains = 2.5 million won per year of keeping
However, the special deduction for long-term possession or capital gain deduction is not
allowed for unregistered real estate.
※ For a highly priced house the value of which is 600 million won or more, to which
the “one house per household” rule does not apply.
C. Deduction for Global Income
In terms of calculation of the tax base and tax amount, a non-resident is not entitled to
basic deduction(except for himself), additional deduction(except for himself) and special
deduction. A brief on the income deductions are addressed below.
▶ Basic deduction
Residents with global income are entitled to annually deduct an amount equivalent to 1
million won multiplied by the number of persons in the taxpayer's family, as determined
below.
- A resident taxpayer himself/herself
- A spouse with income of less than 1 million won per year
- Dependents earning 1 million won or less per year and living in the same household
with the taxpayer
- The handicapped spouse of a handicapped person who is a linear descendant of the
taxpayer is eligible for basic deduction with income of less than 1 million won per year
※ A dependent eligible for the deduction is a lineal ascendant aged 60 years old or
more(55 years old or more for female), a lineal descendent of the resident aged 20
years old or less(there is no age restriction for a handicapped person), a sibling aged
20 years old or less or 60 years old or more(55 years old or more for female), and
all other members of the household supported by the resident.
▶ Additional deduction
When a person who is qualified for Basic Deduction(taxpayer himself/herself, his/her

spouse, dependents) falls under any of the following situation, the amount calculated by
multiplying the number of persons by the amount below, shall be deducted each year from
the taxpayer's income under each case.
ⅰ) where the person is 65 years old or more: ￦1,000,000 per capita
- 70 years old or more: ￦1,500,000 per capita
ⅱ) where the person is handicapped, as prescribed by §107 of the Enforcement Decree
of the Income Tax Act: ￦2,000,000 per capita
ⅲ) where the person is a married woman having her spouse, or a head of family having
dependents has no spouse: ￦500,000 per capita
ⅳ) where employees who have lineal descendant under 6 years old: ￦1,000,000 per capita
ⅴ) where employees who have a new born or adopted child in the current year:
￦2,000,000 per capita
[Basic Deduction]
Q. My parents live back home in my home country. Are they eligible for basic
deductions?
A. Yes, you may receive basic deductions for your parents living in your home
country, as long as they are your dependents and their adjusted wage and salary
does not exceed ￦1,000,000 per year.
You may receive an additional deduction of ￦1,000,000 per parent aged 65 or older,
and ￦1,500,000 per parent aged 70 or older.
▶ Additional deduction for households with multiple children
A resident with wage and salary income(excluding daily workers) or business income who
has two or more dependent children eligible for basic exemption may deduct 500,000 won
plus additional 1 million won per every child added to the first two children from his/her
global income(e.g. 500,000 won for 2 children, 1.5 million won for 3 children, 2.5 million
won for 4 children).
▶ Pension saving deduction
Pursuant to Article 51-3 of the Income Tax Act, the total of following pension
contribution paid for pension insurance in the name of the taxpayer him/herself is
deducted.
- Pension insurance contribution paid by the taxpayer him/herself based on National

Pension Law
- Contribution paid by the taxpayer him/herself based on Soldier Pension Law, Civil
Service Pension Law etc.
▶ Special deduction
Wage and salary income earners may deduct an amount equal to the sum of the following
from their wage and salary income, during the taxable year.
(a) Insurance premiums paid, up to 1 million won: This limit does not apply to amounts
paid for medical care insurance
(b) Insurance premiums of insurance exclusively offered for handicapped persons, up to 1

million won
(c) Medical expenses incurred exceeding 3% of wage and salary income, up to 5 million
won: The deduction ceiling does not apply to expenses paid for the rehabilitation of
handicapped dependents, aged and taxpayer himself
(d) The deduction for education expenses of descendants is limited to the following
amounts: 2 million won annually per student for kindergarten and nursery school
expenses, 2 million won annually per student for elementary-junior-and high school
expenses, and 7 million won annually per student for college education expenses.
Educational expenses incurred overseas by lineal descendants are eligible for deduction
with following limits (annually, per student): 2 million won for kindergarten, 2 million
won for elementary, junior, and high schools, and 7 million won for college.
Education expenses for the taxpayer himself, including tuition fee for graduate school,
may be deducted without a ceiling.
(e) Special education cost for the disabled prescribed by §111 of the Enforcement Decree
of the Income Tax Act: No ceiling
(f) 40% of deposits of an qualified account earmarked for purchasing a house, which is
held by a person who does not own a house during the year concerned or a person
who owns only one house whose standard market price is less than 300 million won
and is smaller than specified size prescribed by §112 of the Enforcement Decree of
the Income Tax Act
(g) 40% of the loan interest allotted to the lease of a house of appropriate size paid by a
person without housing or owning only one house who is subscribed to a qualifying
savings program for home ownership
(h) Interest of a mortgage loan whose standard market price is less than 300 million won
at the time of purchase with the duration of more than 15 years
(i) Deduction for donations: amounts donated to qualified institutions, up to 10% of the
taxpayer's salary and wage income for the year. This limit of deduction does not apply
to the donations to specific welfare facilities prescribed by §34② of the Income Tax
Act.
▶ Standard deduction
Alternatively, a wage and salary income earner may choose an annual standard deduction
of 1,000,000 won. A global income earner, who does not have a wage and salary income,
may choose an annual standard deduction of 600,000 won.
Tax Rates and Tax Credits
A. Tax Rates Structure
The tax amount on global income is the aggregate of amounts calculated by applying each
tax rate successively to the income in the relevant tax bracket:
☞ Basic Tax Rates
Tax Base of Global Income Tax Rates
12 million won or less 8%
12～ 46 million won or less 960,000 won + 17% of the amount over 12 million won
46～ 88 million won or less 6,740,000 won + 26% of the amount over 46 million won
over 88 million won 17,660,000 won + 35% of the amount over 88 million won
☞ Example : Computation of Tax
If your annual tax base is 14,250,000 won, your income tax is computed as follows;
1) Since your tax base is in the 12,000,000 won to 46,000,000 won bracket, the tax
rate applied is 17%
2) The amount of your tax due is 1,342,500 won computed by multiplying the tax
base by 17% of the amount over 12 million [2,250,000won × 17% = 382,500
won], and then by adding 960,000 won.
B. Tax Credits
▶ Tax credit for dividend income
Where dividend income of a resident received from a domestic corporation is included in

global income, the amount calculated as below is deducted from the global income tax
amount.
(a) 15/100 of the qualified dividend income is added to the amount of dividend actually
received by the shareholder.
(b) The amount calculated in (a) above is used in calculating the individual income tax amount of
the shareholder.
(c) Thereafter, the amount 15/100 of the qualified dividend income is credited against the
individual income tax amount calculated in (b).
※ Gross-up is applied to the dividend income exceeding 40 million won which is

subject to Income Tax
▶ Foreign tax credit
Where a resident has paid or is to pay foreign income tax abroad, the tax amount payable is
deducted from the income tax within the limit of an amount equivalent to an amount calculated
by multiplying the income tax amount by the ratio of income from foreign sources to the total
taxable income. If any foreign income tax amount paid or to be paid to a foreign government,
exceeds a deduction limit, the excess amount may be carried forward for up to five years, and
deducted within the deduction limit of that taxable period. An application for deduction shall be
filed not later than the end of the final tax return period or the end of the year-end tax
settlement period.
▶ Tax credit for casualty loss
When a resident loses 30% or more of the total value of his business assets from one or
more disasters, an amount equal to the tax due without application of this credit multiplied
by the ratio of the value of the lost assets over the total value of assets owned prior to a
disaster is subtracted from the amount of tax due in the taxation period where the time of
the disaster(s) belong(s)(limited to the value of loss caused by casualty).
▶ Tax credit for wage and salary income
The following amounts shall be credited against global income tax on wage and salary
income. Where the amount of credit over 500,000 won, the credit is limited to 500,000
won.
☞ Tax Credit for Wage & Salary Income

Total tax Amount of tax credit
Up to 500,000 won 55% of total tax

More than 500,000 won 275,000 won + 30% of amount over 500,000 won
▶ Tax credit for bookkeeping
Eligibility
- taxpayers who calculated their revenue income according to the books and records they
kept as a qualified taxpayer* to use simplified bookkeeping regime
Deducted tax amount

amount of recorded & filed income
- Deducted tax amount = calculated tax amount × × deduction rate**
amount of global income
** Deduction rate: 10% when using simplified bookkeeping regime

20% when using double entry bookkeeping regime
Maximum deduction amount: 1million won
* Eligibility for simplified bookkeeping regime

ⅰ) taxpayers who started new business in the relevant year
ⅱ) taxpayers whose total revenue amount in the previous year is less than the following
ⓐ Manufacturing, Hotels and Restaurants, Electronics․Gas and Water-supply, Construction,
Transport, Storage & Communications, Finance & Insurance: 150 million won
ⓑ Real Estate, Service(Personal Service): 75 million won
ⓒ Other business types : 300 million won
Return and Payment
A. Tax Return
▶ General
Under the 1994 tax reform, the individual income tax assessment system was revised as
into a self-assessment system under which each taxpayer is required to file a return and
pay the proper amount of tax by the due date as prescribed by the individual income tax
act.
▶ Interim prepayment for global income
A resident with global income is subject to pay, as interim prepayment, an amount

equivalent to half of the global income tax amount paid or payable in the preceding year,
by the end of November.
‘The income tax amount paid or payable in the preceding year’ is the aggregate of the
tax amount payable for interim prepayment in the preceding year, the tax amount finally
payable and the amount of penalty taxed.
▶ Final return and payment
Return on tax base

- A resident who has global income, retirement income or capital gains in the taxable
period is required to file a return to the competent district tax office in the place of tax
payment within the period from May 1 to May 31 in the following the year concerned.
Documentation
- Tax returns are required to be accompanied by the following documents
․Documents certifying a person eligible for personal deductions
․Documents in which gross receipts and necessary expenses calculated are recorded
․In the case of persons who have real estate income or business income, a balance sheet,
an income statement, a trial balance, and other required documents
․The simplified income account statement of taxpayers whose size of business is below
a certain level as specified in §208⑤ of the Enforcement Decree of the Income Tax Act
․Particulars of tax free reserves
Residents not liable for submitting final returns

- The following residents are not liable to submit final returns
․A resident who has only ① wage and salary income, ② retirement income, or ③
both ① and ②
․A resident who has only capital gains and has filed a preliminary returns
․A resident who has only ① interest income subject to separate taxation, ② dividend
income subject to separate taxation, ③ both ① and ②, or ④ other income subject to
separate taxation
․A resident with Class B wage and salary income or retirement income who has paid
income tax using taxpayer association
In the event that a resident liable for making the final return on the tax base departs from
Korea to move his domicile to a foreign country, he shall make the return on the tax
bases for the taxable period and the taxable period immediately preceding the taxable
period of the date of departure, not later than 10 days from the date of departure.
[Currency Conversion of Wage and Salary Paid in Foreign Currency]
Q. I have been working in Korea since early last year. I receive my wage and salary
from the US head office on the 20th of every month. I would like to file a tax
return on the income. I wonder how I should declare my wage and salary paid in
the foreign currency?
A. If wage and salary is paid in the foreign currency, the currency should be
converted into won as follows:
If you are paid wage and salary before the agreed date of payment, you should
apply the standard exchange rate of the actual payment date. If you are paid wage
and salary on or after the agreed date of payment, you should apply the standard
exchange rate of the agreed date of payment.
[Special Case of Final Return on Tax Base]
Q. I am a foreigner, and have run my own business for a couple of years in Korea.
I am returning to my home country in April this year. Should I declare my global
income tax for 2008 in May this year? And how may I go about filing a tax
return on income earned in 2009?
A. If a foreigner subject to the global income tax leaves Korea, he/she should file a tax
return not later than 10 days before departure. In your case, you should declare your
income earned attributable to 2008 and until the day of your departure in 2009 not later
than 10 days from the date of departure.
B. Tax Payments
▶ Payment of individual income tax
A resident who has submitted a tax return shall pay an amount remaining after deducting
the amount enumerated below from the calculated tax amount of global income, retirement
income or capital gains for each taxable period within the return period
- Tax credit amount
- Interim prepayment
- Estimated tax payment by real estate dealer, or for capital gains
- Tax paid for occasional assessment
- Tax withheld at source
- Tax paid through a taxpayers association
A resident with tax liability exceeding 10 million won, tax, as described below, may pay
tax accrued in installments within 2 months from the closing day of the payment period.
- If the tax amount is 20 million won or less; the excess over 10 million won
- If the tax amount exceeds 20 million won: less than half of the tax amount payable
▶ Payment of special tax for rural development(STRD)
Taxpayer
- An individual or corporation whose tax liability(individual income tax, corporation tax,
customs duty, acquisition tax, or registration tax, etc.) is reduced under the Restriction of
Special Taxation Act, Local Tax Act, or Customs Act.
Tax Base and Tax Rates

- Basically, Special Tax for Rural Development is a surtax levied on the amount of
exemption of individual income tax, corporation tax, customs duty, special excise tax,
and securities transaction tax. The tax base of STRD is the exempted amount of the
above mentioned taxes, where the exemptions are stipulated in the Restriction of Special
Taxation Act etc. Key tax rates are as follows :
☞ Tax Base and Rates

Tax Base Tax Rate Reference
Exemptions of individual Except for tax reduction for
20%
income tax, corporation tax etc. development technology, public project, etc.
Reduction of eligible interest
10%
from savings account
Return and Payment

- STRD is filed and paid at the same time global income return (tax) is filed (paid).
▶ Payment of inhabitant tax for pro rata income
Taxpayer: Individuals liable to the payment of income tax, or farmland tax
Tax Base
- amount of income tax, which means inhabitant tax is a surtax assessed on the basis of
income tax.
- Taxation period : 1 year
Tax Rates: 10% of income tax
Return and Payment

- In cases where pro rata income tax is filed by a taxpayer, he/she shall file a return and
pay the computed tax.
▶ Tax Payment using credit cards
Eligible tax items

- VAT, individual income tax, comprehensive real estate tax, individual consumption tax
and liquor tax paid by individual taxpayers
- Sur-tax such as education tax and special tax for rural development is included.
Maximum limit: 2million won per payment made for each tax item
- For tax notified: to 2million won or less
- For tax filed: to 2million won
How to pay tax with credit cards

- Through tax office, credit card company and internet (www.cardrotax.or.kr)
- Credit card fees (around the range of 1%) are to be paid by taxpayers
☞ Taxpayer Associations
• Organization
- Class B wage and salary income earners, sellers of agricultural and livestock
products, and vendors may organize a taxpayer association for the purpose of tax
payment.
• Obligation to collect tax

- A taxpayer association shall collect income tax from its members each month.
• Payment of tax
- Income tax collected by a taxpayer association for each month will be paid by
the 10th of the following month.
• Tax credit for payment of tax by taxpayer associations … 10%
• Penalty tax for non-payment by taxpayer associations … 5%

Global Income Tax of compliant SMEs
A. Application of simplified method for tax calculation
If an SME whose revenue income amounts to a certain level or less and who records
its transactions transparently and uses double bookkeeping regime in a compliant manner
applies and gets an approval for simplified tax calculation methods from the competent
district tax office, the SME can decide its tax base and calculate tax payment due for
its global income tax incurred during the taxation period according to a simplified and
standardized tax calculation methods.
B. Eligibility of compliant SMEs
1) taxpayers whose applicable revenue income of the taxation period is equal to or less
than the benchmark revenue below
ⅰ. Agriculture, Hunting & Forestry, Fishing, Minning, Wholesale and Retail Trade, and
other types of business which do not fall under following categories : 600 million won
ⅱ. Manufacturing, Hotels and Restaurants, Electronics․Gas and Water-supply, Construction,
Transport, Storage & Communications, Finance & Insurance : 300 million won
ⅲ. Real Estate, Service(Personal Service) : 150 million won
2) taxpayers meeting the requirement of Article 87-2(1)➁ of the Income Tax Act
3) taxpayers who submitted an application form to the competent district tax office for
using the simplified methods of tax calculation within 2 months from the end date of
the applicable taxation period and got an approval
C. Special tax treatment in calculating tax base
- Simplified calculation of depreciation expense: depreciating only with fixed amount

method and applying 5 years of durable years (20 years for buildings)
- Contribution limit : 1% of revenue. The excess is not eligible for carried forward tax credit.
- Entertainment expense limit: 19 million won
- Accumulative limit of allowance for retirement: 20% of the total wage and salary
income of a worker
- Income deduction under the Restriction of Special Taxation Act is not applied here.
D. Special tax treatment for tax credits
- Standard tax credits: providing tax credits of 25% of calculated tax amount to
taxpayers running businesses eligible for the special tax reduction and exemption for
SMEs (15% for taxpayers in the metropolitan area)
- Tax credits for increased revenue : providing tax credits for the revenue that exceeds
115% of the income year on year
- Tax credits and tax reduction & exemption under the Restriction of the Special
Taxation Act are not applied here. If there are some tax credits carried forward to
the next year before a taxpayer got an approval to use simplified tax calculation
methods, the carried forward tax credits are deemed as terminated.
Assessment and Collection
The income tax is to be self-assessed and filed by the taxpayer. However, the government
will correct the tax base and the tax amount if there are any omissions or errors in the
returned file, or if the taxpayer has not submitted the payment statements or the aggregate
summary of accounting statements in whole or in part.
A. Determination and Correction of Tax Base and Tax Amount
In cases where the government determines or corrects the tax base and the tax amount
payable by a taxpayer, the tax base and the tax amount must be determined or corrected
according to the law based on the final return and attachments thereto, or by a field audit.
Determination on no-filer must be completed within a year from the filing due date except
in cases such that the Commissioner allows an extension of time for special investigation,
or approves a late determination based on extenuating circumstances.
B. Notice on Tax Base and Tax Payable
If the government determines or adjusts a tax base or a tax amount, the government shall
notify the concerned resident the tax rates and/or any other necessary matter in writing.
C. Collection of Tax
If a taxpayer does not pay the full tax amount for the year in question, the government
will endeavor to collect the unpaid tax amount within three months after the due date of
payment.
When the income tax amount paid by the taxpayer is less than that determined by the
government, the unpaid amount of tax will be collected.
D. Minimum Taxable Floor
If the amount of income tax payable is less than the following amount, income tax is waived.
- Withholding tax(excluding tax of interest income) : 1,000 won
- Interim prepayment tax : 200,000 won
Tax Withholding
A. Obligation of Tax Withholding
A person paying interest, dividends, business profits prescribed by §184 of the

Enforcement Decree of the Income Tax Act, Class A wage and salary income, and
retirement income, or other income is required to withhold income tax due thereon at the
time of such payment, and to pay it to the government by the tenth day of the following
month. However, a businessman who has not more than 10 employees on average at the
end of every month of the preceding year may pay taxes withheld to the government by
the tenth day of the following month each half-year, after obtaining the approval of the
head of the tax office concerned.
B. Rates of Withholading
▶ Interest income
14%
※ Interest from non-commercial loans : 25%
▶ Dividend income
14%
※ Dividend income paid to co-investors as specified in §17 ① 6-3 of the Income Tax Act: 25%
▶ Business income
VAT-exempt business income from personal services and medical or health services :
3% of total revenue
▶ Class A wage & salary income
Tax rates : the basic tax rates applicable to global income
Monthly Tax Withholding : If wage or salary is paid monthly, the tax amount to be withheld
is calculated by the "Simplified Tax Table" attached at the end of the Income Tax Act.
Year-end Tax Settlement : A person subject to tax withholding must calculate the total
annual tax amount in January of the following year or at the time of the last payment of
income in the year and collect or refund the difference between the tax amount payable.
This amount is calculated by applying the basic tax rates and the tax amount withheld,
which is explained in the "Simplified Tax Table."
Application for personal deduction : Class A wage and salary income earners who are
entitled to personal deductions must submit an application for personal deductions, together
with documentary evidence, to the withholding agent before receiving wage and salary
income for January of the following year.
▶ Class A retirement income
the basic tax rates applicable to global income
▶ Pension income
National pension, government employee pension: basic tax rates (identical to wage and salary
income tax)
Retirement pension, private pension: 5%
▶ Other income
20%
Tax Penalties
A. Penalty on Failure to File Returns
If a resident either fails to file a tax return or under-reports income, penalties shall be
charged at the following rates:
(1) Failure to file: the larger of the two

- Calculated Tax × 20%
- Gross Revenue × 0.07%
(2) Under-reporting
(3) Willful failure to file or willful under-reporting, the larger of the two
- Gross Revenue × 0.14%
B. Penalty on Non-payment or Underpayment of Tax
When the income tax payable with the final return has not been paid in full, a penalty in
the amount of 0.03% of the amount shall be added to the amount of the tax due, for
each day the amount remains unpaid.
C. Penalty Tax on Failures to Withhold Tax
If withholding agent fails to withhold tax at source or fails to pay the government tax
withheld within the payment period, the larger of either (1) or (2) shall be imposes as
penalty.
(1) An amount of unpaid tax that multiplies 0.03% by the number of unpaid days (limited
to 10% of unpaid tax)
(2) An amount equivalent to 5% of unpaid tax.
D. Penalty Tax on Failures to Report Withholding Payment Records
If withholding agent fails to submit a payment record within the reporting period or if the
reported facts concerning payment are found to be unclear as specified by §147 of the
Enforcement Decree of the Income Tax Act, a penalty in the amount of 2% of the
payment due shall be charged.
However, a penalty in the amount of 1% of payment due shall be charged, if the

withholding agent submits the withholding payment record within 1 month after the due
date.
E. Penalty Tax on Failures to Maintain Adequate Books and

Records
If a taxpayer operating a business fails to maintain proper books and records, such
taxpayer will be subject to penalty tax equal to 20% of the amount of tax due for the tax
year involved multiplied by the following rate "R."
R = improperly documented portion of taxable income divided by total taxable income

(* If R is larger than 1, R is assumed as l. If R is smaller than 0, R is assumed as 0.)
F. Penalty Tax on Failure to use business purpose bank account
If taxpayers subject to double bookkeeping regime do not open, declare or use business
purpose bank accounts within the due date, penalty taxes should be applied as follows.
- Penalty tax on failure to open/register : the bigger of 0.2% of gross revenue and 0.2%
of unused amount
- Penalty Tax on failure to use: unused amount × 0.2%
Bookkeeping and Reporting
A. Bookkeeping
A taxpayer conducting a business shall maintain books and records adequate to support the
computation of the amount of taxable income. Such books and records shall be of
sufficient detail to allow an inspector to understand the relevant facts of all transactions
conducted by the business.
B. Reporting
▶ Payment records
Persons who pay the following must submit to the government a monthly report by the
10th of the following month in which the payments were made. However, payments of
wages and salary shall be reported by the 10th of March of the following year in which
the payments were made.
- Interest
- Dividends
- Amount withheld from a business
- Wages, salaries, and retirement pay
- Other amounts representing income to the recipient
- Amounts paid to non-residents representing income from domestic sources, other than
wage&salary and retirement payments
▶ Submitting payment records
Under the system of global taxation of financial income, persons required to withhold tax
must supply information regarding the income subject to withholding by the end of
February of the year following the year in which the payments were made (for wage &
salary income by Mar. 10 of the following year, and for the suspension or closedown of
business by the end of the third month from the month where the date of business
suspension or closedown belongs).
Part Ⅲ
In d iv id u al In c o m e Tax
Sys t em f o r No n -r es id en t
Taxation on Non-resident
A. General
A non-resident is liable to tax on income derived from sources within Korea. Two
methods of taxation are applied: global taxation and separate taxation.
- Global taxation is applied to non-resident taxpayers who have a place of business in
Korea and whose domestic source income is related with the place of business or those
with income from real estate located in Korea (excluding capital gains from the transfer
of land or buildings).
- Withholding taxation is applied to each domestic item of income of non-residents who
do not have a place of business in Korea and do not have income from real estate
located in Korea.
A non-resident's tax address is the domestic business place. In the case of a non-resident
who has no domestic business place, its tax address will be the place where such income
is derived.
B. Income from Domestic Sources
▶ Interest Income
Interest and discount on bonds or securities issued by the national government or local
autonomous bodies and other profit from a trust or non-commercial loan as prescribed by
the following subparagraph shall be regarded as a domestic source income.
- interest paid by the national or local government, a resident, a domestic corporation of
Korea, a foreign corporation's PE in Korea, or a non-resident's PE in Korea
- interest received from a foreign corporation or a non-resident, where a PE of the
concerned party includes the interest paid in computing taxable income as deductible
expenses related to its operation
However, interest paid on funds borrowed directly by a Korean resident's permanent

establishment (PE) in a foreign country or by a Korean corporation for its business outside
Korea shall not be considered as domestic source income.
80 P art Ⅲ . Individual Incom e T ax S yste m for N on-reside nt
▶ Dividend income
- Dividend of profits or distribution of surplus from a domestic corporation, and interest

received during the construction period fro a domestic corporation under §463 of the
Commercial law
- Dividend or distribution of surplus from a non-corporate entities
- Deemed dividends
▶ Real estate income
Income arising from the transfer of a lease, or any other interest from real estate located
in Korea, including titles to the real estate, rights related to real estate, mining rights, or
quarrying rights located in Korea, excluding income subject to capital gains tax
▶ Lease income of vessels, aircraft, etc.
Income arising from the lease of vessels, aircraft, registered automobiles or heavy
equipment to residents, domestic corporations, or the Korean places of business of
non-residents and foreign corporations
▶ Business income
Income arising from performance of services in the following industries: livestock, forestry,
hunting, fisheries, mining, quarrying, manufacturing, electricity/gas/water services,
construction, warehousing, communications, real estate dealing, services, and professional
services (excluding personal service income)
▶ Personal service income
An amount receivables as payment for furnishing personal services such as:
- services provided by lawyers, certified public accountants, licensed tax accountants,

certified architects, public surveyors, patent lawyers, and others in liberal professions
- services rendered by persons having expert knowledge or special skills in science,
technology, business management, or other fields involving the utilization of such
knowledge or skills
- services provided by professional athletes

- services provided by actors, musicians, or other public entertainers
▶ Wage and salary income including pension or severance pay
The amount received as payment for labor performed in Korea
▶ Capital gains
Gains derived from the transfer of land and buildings located in Korea
▶ Royalties, etc.
Royalties, rents, or any other consideration of a similar nature receivable for the use of
the following assets or technical information within Korea, or for the right to use such
assets or technical information, and income arising from the transfer of said assets or
technical information.
- Copyrights on academic or artistic works (including motion pictures), patent rights,

trademark rights, designs, models, drawings, secret formulae or processes, films and tapes
for radio and television broadcasting, and any other similar assets or rights
- Industrial, commercial, or scientific knowledge, experience, or skill
▶ Capital Gains from securities transfer
Gains arising from the transfer of investment securities or shares invested in a domestic
corporation or other securities issued by a domestic corporation or the domestic business
place of a foreign corporation. However, gains arising from the transfer by a nonresident
of domestically listed shares or corporate shares registered with the Korean Securities
Dealers Association shall not be taxed, subject to the reciprocity principle.
▶ Other income
Other income are as follows :

- Insurance money, compensation money, or compensation for damages received in connection
with real estate or other assets located in Korea, or those related to businesses conducted
in Korea
- Money, goods, or other economic benefits received as a prize from contests held in
Korea
- Income from sale of treasure found within Korea
- Income from the assignment of rights established by license, permission, or other similar
disposition within Korea under the Korean law, or from the transfer of property located
in Korea at the time of transfer, other than real estate
- Money or goods received as a prize in a lottery, drawing, or any other contest,
including the purse payable to the buyer of a winning race ticket
- Income other than those described above, arising from a business operated in Korea or
the provision of personal services in Korea; in addition, this subparagraph includes
economic benefits received in connection with assets in Korea (Note that if the amount
received from the redemption of bonds issued by the government or banks established
under the laws of Korea in a foreign currency exceeds the face value of such bonds in
foreign currency, the balance in value shall not be included under this section.)
C. Domestic Business Place
▶ Types of domestic business place
If a non-resident has a fixed place of business in Korea of a type described below, he or

she is deemed to have a domestic place of business.
- A branch or any other business office
- A store or any other fixed sales place
- A workshop, factory, or warehouse
- A building site, a location of construction, assembly or installation work, or a place for
providing supervision of such work, any of which exists for more than 6 months
- A place for providing service through an employee, which falls under any of the
following items:
․A place where service is rendered for the period exceeding 6 months in total from
among 12 month period during which a provision of service is continued, or
․A place where service of similar kind is continually and repeatedly rendered for 2 or
more years, in the case of not exceeding 6 months in total from among 12 month
period during which a provision of service is continued
- Mine, quarry or place where any submarine natural resources and other natural resources
are probed or taken
The domestic places of business prescribed in the preceding paragraph do not include the
following:
- a fixed place used by a non-resident only for the purchase of assets,
- a fixed place used by a non-resident only for storage or custody of assets for
non-business purposes,
- a fixed place used by a non-resident for advertisement, public relations, collection or
furnishing of information, market survey, or other activities of a preparatory or auxiliary
nature for a business operation, or
- a fixed place used by a non-resident only for the purpose of having other persons
process property of the non-resident
▶ Dependent agent
If a non-resident having no fixed place in Korea carries on a business through a person in

Korea who is authorized to conclude and regularly does conclude contracts on the
non-resident's behalf, such non-resident is deemed to have a place of business in Korea. In
addition, a non-resident having no fixed place in Korea who carries on a business in
Korea through any of the following persons is also deemed to have a business place in
Korea.
- A person who regularly takes custody of goods delivered to Korea and delivers them to
customers upon receipt of orders
- A person who regularly takes orders, carries on consultations, or conducts other
important activities specifically for such non-resident
- A person who collects insurance premiums or insures risks located in Korea on behalf
of such non-resident
D. Tax Withholding on Non-resident
In terms of taxation method, there is difference between non-resident with domestic business
place and non-resident without domestic business place. A non-resident who has a domestic
business place (or real estate income) is subject to income tax and is required to file his/her
tax return on all of his/her income related with the domestic business place in the same
manner as in the case of resident. On the other hand, unless otherwise provided in an
applicable tax treaty, persons paying income from domestic sources to non-residents
(excluding non-residents having real estate income), not attributable to a domestic business
place, shall withhold as income tax at source of the income the applicable amount
enumerated below. The tax withheld must be paid to the government by the 10th day of the
following month in which such tax was withheld.
☞ Taxation on Non-Residents with a Fixed Base
Tax Base of Global Income Tax Rates
12 million won or less 8%
12～ 46 million won or less 960,000 won + 17% of the amount over 12 million won
46～ 88 million won or less 6,740,000 won + 26% of the amount over 46 million won
over 88 million won 17,660,000 won + 35% of the amount over 88 million won
☞ Withholding Tax Rates (Non-resident without Domestic Business Place)
Korean-Source Income Withholding Tax Rates
Gross Revenue from Business 2%

Compensation for Personal
20%
Services
Capital Gains from Securities 10% of sales price or 20% of the difference
between sales price and seller's original cost,
Transfer whichever is less
Dividends, Interest, Royalties,
20%
and Other Income
- Lease income of vessels, aircraft, etc., and business income: 2% of the amount payable
- Interest income, dividend income, royalty, and other income: 20% of the amount payable
- Gains from the transfer of securities or shares: 10% of the amount payable. However, if
the purchase price of the securities or shares can be readily confirmed, the amount of
tax withheld at source is the lesser of 10% of the amount payable or 20% of the gain
on such a sale.
※ In addition to the withholding tax rates given above, inhabitant surtax of 10% is
assessed on these withholding taxes. It should be noted that there are various
limitations on these withholding taxes for residents of countries which have a tax
treaty with Korea.
Taxation on Wage & Salary Income

of Non-resident
While the provisions of the Income Tax Act in terms of tax withholding, the calculation of
the tax base and tax amount to be paid, filing and payment of wage & salary income of
a resident are applied to resident and non-resident alike. However, basic income deduction
and additional deduction are granted only to a non-resident taxpayer himself/herself (not to
his/her dependents). Special deduction is not allowed for non-residents.
A. Non-resident with Class A Wage & Salary Income Only
Class A Wage & Salary Income means salary, remuneration, annual allowance, allowance,
bonus and any other allowances of a similar nature received in return for services as
mentioned before. Taxation methods applied for non-residents who have Class A wage &
salary Income only are same as in the case of a resident. That is to say, a
person(employer whose role is a withholding tax agent) who pays monthly wage income
to his/her employees shall withhold a tax amount monthly based on the Simplified Tax
Table issued by the National Tax Service, the total of which amount is regarded as a
credit taken off from their ultimate tax responsibilities. When an employer pays the wage
& salary of Feb. next year, he/she shall calculate the gross tax liabilities of his/her
employees on behalf of them, from which the withheld amount shall be deducted to bring
forth the final tax amount to be paid. This is called the "Year-end Tax Settlement".
B. Non-resident with Class B Wage & Salary Income Only
▶ Concept of class B Wage & Salary income
This Income means
- Wage and salary receivable from a foreign agency or U.N. Forces in Korea(excluding
U.S. Armed Forces)
- Wage and salary receivable from a foreigner or a foreign corporation outside Korea,
excluding those claimed as a deductible expense for a domestic business place of a
foreigner or foreign corporation
※ Income incurred from the exercise of stock options granted by foreign company is
also included in this category.〔Income = number of exercised stock option ☓
(market price - option price). So, you have to report taxable benefits you received in
2008 on certain stock options you exercised.
★ Regarding the Year-end Tax Settlement for Wage Income Earner, refer to the 'Easy
Guide for Foreigner's year-end Tax Settlement' on our English website.
▶ Non-resident who joined (Class B Wage & Salary Income)

Taxpayer Association
A non-resident who has Class B Wage & Salary Income may organize or join a taxpayer
association and make his/her tax liability settled. In this case, the association withholds
income tax amount monthly on the Class B Wage & Salary Income of its association
members and pays the amount to the tax authority concerned by the 10th of next month.
Like Class A Wage & Salary Income, the Class B Income is subject to the Year-end Tax
Settlement and Taxpayer Association Tax Deduction.
▶ Non-resident who has not joined Taxpayer Association
In this case, the non-resident shall file his/her return(self-assessment) and pay the
calculated tax amount to the tax authority concerned, pursuant to the provisions of tax act
as applied to resident taxpayer from the 1st of May through 31 May of the next year.
C. Non-resident with Class A and Class B Wage & Salary

Income
First of all, an employer who pays Class A Wage & Salary Income shall conduct monthly
tax withholding (as a withholding agent) and year-end tax settlement on behalf of his/her
employees. In the case of the Class B Wage & Salary paid to employees who have
joined a taxpayer association, the association shall take the role of the withholding tax
agent and conduct year-end tax settlement.
- A non-resident who has both Class A and Class B Wage & Salary Income, in principle,
shall file his/her tax return and pay the relevant tax amount to the government. Where,
however, the year-end tax settlement is carried out on the sum of Class A and Class B
Income(only in the case of an employee who joined taxpayer association), the employee
need not to file his/her individual income tax return by himself/herself.
Figure 3. Taxation on Wage & Salary Income of Non-resident
Monthly Tax
Class A Wage withholding by
& Salary Income Simplified Tax Table
Year-end Final
Non- An employee with Tax Return
resident Class A and B Settlement Filing
Monthly tax
C lass B W age withholding by
& Salary Income Class B Taxpayer
Association (10%
Tax Deduction)
Return filing for Class A & B
An employee who has not joined taxpayer association

Part Ⅳ
Pr ac t ic e
Practice In Calculating
A. Example : Lecturer (Wage & Salary Income + Other Income)
▶ Information 1
Mr. A works for a foreign language institute and, in 2008, earned Wage & Salary income
in addition to manuscript fee income from △△Publishing Company.
① Taxpayer(Aged 43) ② Spouse(Aged 41): No income
③ Son(Aged 13): Student
▶ Information 2 : Year-end Tax Settlement of Wage & Salary Income
(1) Wage & Salary Income

① Gross Wage & Salary Income 60,000,000 won (excluding non-taxable income)
② Deduction for Wage & Salary Income 14,500,000 won
③ Adjusted Wage & salary Income 45,500,000 won (60,000,000 won - 14,500,000 won)
(2) Total Income Deductions (5,500,000 won)

① Basic Deduction : 3 persons × 1,000,000 won
② Special Deductions : Qualified educational expenses deduction 2,000,000 won, Qualified
donation deduction 500,000 won
(3) Tax credit for Wage & salary Income : 500,000 won
(4) Withholding Tax : 4,187,500 won
▶ Information 3 : Manuscript fee income (Other income)
① Fee : 40,000,000 won ② Necessary expenses(80%) 32,000,000 won

③ Other Income : 8,000,000 won
(Fee 40,000,000 won - Necessary expenses 32,000,000 won)
④ Withholding tax : 1,600,000 won
(Other Income 8,000,000 won × withholding tax rate 20%)
92 P art Ⅳ . P ractice
- If Mr. A only has Wage & salary Income adjusted at the year-end, he is not subject
to final tax return. However, since he has Other Income along with it, he should file
tax return adding the Other Income to the Wage & Salary Income.
▶ Procedure of filling out Mr. A's Return
❶ Fill out Basic Information ⇒ ❽ Fill out the Details of Wage & salary Income and
Other Income ⇒ ❾ Fill out the Details of Global Income ⇒ 11 Fill out the Details of
Deductions ⇒ 13 Fill out the Details of Tax Credit ⇒ 16 Fill out the Details of Tax
Prepaid ⇒ ❹ Computation of Income Tax ⇒ Fill out Tax Payment Slip (Income Tax &
Inhabitant Tax)
▶ Instruction Filling out the each items
○ Mr. A shall fill out each line as follows :
❶ Basic Information (see page 3 of Form 40(1))

① Name ② Alien Reg. No. ③ Address ④ Home phone No. ⑤ Business phone
No. ⑥ Mobile Phone No. ⑦ E-mail address
⑧ Type of Return : Check "○" in "ꊽ ꋃ Non-business".
⑨ Classification by Scale : Check "○" in "󰊳 Non-business".
ꊒ Return Classification : Check "○" in "ꊺ
ꊉ ꋃ Regular".
❽ Details of Wage & salary Income and Other Income (see page 11 of Form 40(1))
- Wage & salary Income
① Income Classification Code : 51
② Serial No. : 1
③ Company Name, ④ Tax Reg. No. (Alien Reg. No.) : Fill out the Company Name
& Tax Reg. No. (or Alien Reg. No.) of Sources (see the receipts of tax withheld).
⑤ Gross Receipt : 60,000,000 won (see the receipts of tax withheld)
⑥ Necessary Expenses : 14,500,000 won(see the wage & salary Deduction on the
receipts of tax withheld)
⑦ Taxable Income : 45,500,000 won (⑤-⑥)
⑧ Income Tax : 4,187,500 won (see the Tax Determined on the receipts of tax
withheld)
- Other Income
① Income Classification Code : 60
② Serial No. : 1
③ Company Name ④ Tax Reg. No. (Alien Reg. No.) : Fill out the Company Name
& Tax Reg. No. (or Alien Reg. No.) of Sources(see the receipts of tax withheld).
⑤ Gross Receipt : 40,000,000 won(see the receipts of tax withheld)
⑥ Necessary Expenses : 32,000,000 won(Necessary Expenses of Fee(Other Income))
⑦ Taxable Income : 8,000,000 won(⑤-⑥)
⑧ Income Tax : 1,600,000 won(see the Withholding Tax on the receipts of tax
withheld)
❾ Details of Global Income, Deficit and Deficit Carried Over Deduction (see page 13 of
Form 40 (1))
① Amount of Income by Income Classification : Fill it with figures shown in the line
⑦(the sum of taxable income) of the block ❽ (page 11).
․ Wage & Salary Income : 45,500,000 won
․ Other Income : 8,000,000 won
You do not have to fill out ②～④ which are not applicable.
Therefore the amount of ⑤ is same as the amount of ①
ꊧ Details of Exemption and Deductions (see page 15 of Form 40 (1))

ꊝ
① ～ ⑳ : Enter figures shown in line (the Total Income Allowances) on the receipts of
tax withheld for Wage and salary Income.
ꊩ Details of Tax Credits (see page 17 of Form 40 (1))

ꊝ
① Article (title) of the Related Tax Law : Article 59 (Wage & salary Income Credit)
of the Income Tax Act
󰊝 Details of Tax Prepaid (see page 19 of Form 40 (1))

󰊬
⑧ ~ ⑩: Enter the withheld tax amount on the "Details of Wage & Salary Income and
Other Income".
[Form 40 ⑴] (Page 3)
Residency Resident1/Non-resident2
Control (For the year of 2008) Final return of Tax Base and
－ Computation of Global Income Tax, Special Tax for Nationality Citizen1/Foreigner9
No
Rural Development and Inhabitant Tax to be paid Application of Flat tax rate Yes 1 / No 2
State of State Code
Residence
❶ Basic Information
① Name Mr. A ② Alien Reg. No. 6 5 0 8 0 1 － 5 1 1 1 1 1 1
City, Gu, City, Dong, Eup, Stree Beo Ho Apt., Building Dong Ho
③ Address Province Goon Myeon t, Ri nji etc.
Seoul Jongno Susong 104
④ Home phone No. 397-0001 ⑤ Business phone No. 397-0002
⑥ Mobile phone No. 010-123-4567 ⑦ E-mail address taxpayer@nts.go.kr
ꋄ Self adjustment
ꊺ ꋅ External adjustment
ꊺ ꋃ Simplified bookkeeping
ꊻ
⑧ Type of Return ꊼ ꋄEstimate-Standard rate ꊼ ꋅEstimate-Simplified rate ꊽꋃNon-business 󰊾 󰋃Additional Return
⑨Classification by Scale 󰊱 Double entry bookkeeping 󰊲 Simplified bookkeeping 󰊳 Non-business
⑩Return Classification ꊺ ꋃ Regular ꊻ ꋃ Amended declaration ꊼ ꋃ Claim for correction ꊽ
ꋃ Return after due date
❷ Bank Account for Tax Refund ⑪ Name of Bank ⑫ Account No.
⑭Business ⑮Phone
⑬Name - -
Registration No. No.
❸Tax
Attorney ꊉ ꊘ 󰊱 Bookkeeping and return ꊙ
ꊉ ꊚ
ꊉ
Type of 󰊲 Adjustment for taxable income Control - Designa －
assignment 󰊳 Preparing return No. ted No.
❹Computation of Income Tax
Global Income
Classification Tax Inhabitant Tax Special Tax for Rural Development
Amount of Global Income ꊓ

ꊊ 53,500,000
Total Income Allowances ꊔ
ꊊ 5,500,000
Tax Base ( ꊊ
ꊓ-ꊊ
ꊔ) ꊕ
ꊊ 48,000,000 ꊓ
ꊌ 6,460,000 ꊓ
ꊍ
Tax Rate ꊖ
ꊊ 26% ꊔ
ꊌ 10% ꊔ
ꊍ
Tax Calculated ꊗ
ꊊ 6,960,000 ꊕ
ꊌ 646,000 ꊕ
ꊍ
Total Tax Exemption ꊘ
ꊊ
Total Tax Credit ꊙ
ꊊ 500,000
Tax Determined ( ꊊ
ꊗ-ꊊ
ꊘ-ꊊ
ꊙ) ꊚ
ꊊ 6,460,000 ꊖ
ꊍ
Penalty taxes ꊛ
ꊊ ꊗ
ꊍ
Recapture
(Refunded tax amount for Special Tax for ꊒ
ꊋ ꊘ
ꊍ
Rural Development)
Total ( ꊊ
ꊚ+ꊊ
ꊛ+ꊋ
ꊒ) ꊓ
ꊋ 6,460,000 ꊙ
ꊍ
Tax Prepaid ꊔ
ꊋ 5,787,500 ꊖ
ꊌ 578,750 ꊚ
ꊍ
Earned Income Tax Credit ꊕ
ꊋ
Tax Refundable / Tax Due(ꊋ
ꊓ－ꊋ
ꊔ-ꊋ
ꊕ) ꊖ
ꊋ 672,500 ꊗ
ꊌ 67,250 ꊛ
ꊍ
Bala Tax Payable in Installments (within 2 months) ꊗ
ꊋ ꊒ
ꊎ
nce
Tax Payable(ꊋ
ꊖ－ꊋ
ꊗ) ꊘ
ꊋ 672,500 ꊘ
ꊌ 67,250 ꊓ
ꊎ
I declare that I have examined this form and to the best of my knowledge and belief, it is true,
complete, and is accordance with Article 70 of the Personal Income Tax Law, Article 7 of the
Special Tax for the Rural Development Law and Article 177-4 of the Local Tax Law and Article
45 through 45-3 of the Framework Act on National Taxes.
2009 . 5 . .
Taxpayer Mr. A signature
I, as a licensee of tax professional, filled out above tax return fair and Date of Receipt
honestly.
Tax agent (Signature/Stamp)
To Head of District Tax Office
Attachments : Refer to Instruction of page 1 Computerized (Signature)
entry required
[Form 40 ⑴] (Page 11)
❽ Details of Wage & Salary Income, Pension Income, and Other Income
Tax withheld or the

Payer
① ② ⑦ tax collected by
(Domestic working place) ⑤ ⑥
Income taxpayer association
Taxable
Classi- Serial Gross Necessary
③ Company Name (Name) Income ⑧ ⑨ Special
fication
No. Receipt Expenses (⑤-⑥) Income Tax for Rural
Code ④ Tax Reg. No.
(Resident Reg. No.) Tax Development
Jongro Co.
51 1 60,000,000 14,500,000 45,500,000 4,187,500
100-51-00001
△△Publishing Co.
60 1 40,000,000 32,000,000 8,000,000 1,600,000
100-51-00002
[Form 40 ⑴] (Page 13)
❾ Details of Global Income, Deficit and Deficit Carried Over Deduction
① Deficit Carried Over Deducted ⑤

Amount of ② Business Income after
③Deficit Carried ④Deficit Carried
Classification Income by Deficit Deficit /
Over Deduction Over Deduction
Income Deducted Deficit Carried
for Business for Real Estate
Classification Over
Income Income
Interest Income
Dividend Income
Dividend income paid to a
Co-investor (Article 17(1)⑥-3
of the Income Tax Act)
Real Estate Rental Income
Business Income
Wage & Salary Income 45,500,000 45,500,000
Pension Income
Other Income 8,000,000 8,000,000
Total Global Income 53,500,000 53,500,000
ꊦ Statement of Deficit Carried Over

ꊝ
Deficit carried over ③ Amount Current Deduction

Classi- Deducted by ⑦
① Taxation ② ④ ⑤ ⑥
fication Pre- Taxation Balance
Period Amount Current Retroactive Other
Period
Accrued Accrued Deduction Deduction Deduction
Real
Estate
Rental
Income
(30)
Business
Income
(40)
[Form 40 ⑴] (Page 15)

ꊧ Details of Exemptions and Deductions
ꊝ
Exemptions and Deductions under the Income Tax Law
Personal Deduction Special Deductions
Classification Amount Classification Amount

① Basic Deduction ( 3 ) 3,000,000 󰊘 Insurance Premium Deduction
󰊉
③ Person who is 70 󰊙 Medical Expenses Deduction
󰊉
years or older ( )
④ Person who is 70
years or older ( ) 󰊚 Educational Expenses Deduction
󰊉 2,000,000
②
⑤ Handicapped Person ( ) 󰊛 Housing Fund Allowances
󰊉
Additional
Deduction ⑥ Female Worker ( ) ⑳ Deduction for Donations 500,000
(In person) ⑦ Lineal descendant less than ꊓ Marriage ․ Moving ․ Funeral
ꊊ
6 years of age ( )
⑧ New born/newly adopted( )
⑨ Total (③ ～ ⑧)
⑩ A d d itio n al d ed u ctio n fo r
households with multiple children
⑪ Total of Personal Deduction
(①＋⑨+⑩) 3,000,000 ꊔ Standard Deduction
ꊊ
ꊔ National Pension Premium
ꊉ ꊕ
ꊊ
Deduction Individual having wage
Total or salary 2,500,000
⑬ Other Pension Premium of (󰊉
󰊘~ꊊ ꊓ or ꊊ ꊔ)
Deduction Specia
⑭ Deduction for Reverse Mortgage Interest l Individual not having
Deduc wage or salary
󰊗 Retirement Pension Deduction
󰊉 tions (⑳+ꊊ ꊔ)
ꊖ List names of eligible dependents for deduction
ꊊ
Relatio Citize Relatio Citizen
n/ /
nship Name Forei Resident(Alien) Reg. No nship Name Foreig Resident(Alien) Reg. No
Code Code
gner ner
0 Mr.A 9 6 5 0 8 0 1 - 5 1 1 1 1 1 1 -
3 Mrs.A 9 6 7 0 6 0 1 - 6 1 1 1 1 1 1 -
4 Mr.A 9 9 5 0 1 0 1 - 5 1 1 1 1 1 1 -
- -
※ Relationship Code : Yourself=0 Linear ascendant of yourself=1, Linear ascendant of spouse=2,
spouse=3, Linear descendent=4, Brother and Sister=5, others=6 spouse of Linear
descendent=7 (Please state relationship to employee and spouse for 4, 5, 6, 7)
Exemptions and Deductions under the Special Tax Treatment Control Law
ꊗ Article of the Special Tax Treatment Control Law
ꊊ ꊘ Code
ꊊ ꊙAmount
ꊊ ꊚTax Reg No.
ꊊ
󰊛 Sum of Exemptions and Deductions under the Special Tax

󰊊
Treatment Control Law
Sum of Exemptions and

Deductions 5,500,000 ꊘcode
ꊊ are not to be filled out by taxpayers.
󰊒(⑪＋ꊉ
󰊋 ꊔ＋⑬＋⑭＋󰊉 󰊗+ꊊ ꊕ＋󰊊
󰊛)
[Form 40 ⑴] (Page 17)
ꊨ Details of Tax Exemptions

ꊝ
①Article(title) of the Related Tax Law ②Code ③Tax Exemption ④Tax Registration No.
⑤Total of Tax Exemptions
ꊩ Details of Tax Credits

ꊝ
Article 59 of the Income Tax Act 500,000
⑤ Total of Tax Credits 500,000
󰊪 Details of Reserved Funds

󰊝
Amount Deducted
Amount Added Back to
from the Taxable
①Article of the the Taxable Income ⑦
② Income
Restriction of Special Tax Registration
Code ⑥
Taxation Act ③ ④ ⑤ No.
Accumulated
Year Amount This Year
Amount
※ ②code are not to be filled out by taxpayers.

[Form 40 ⑴] (Page 19)
󰊫 Details of Penalty Taxes

󰊝
Classification Calculation Base Target Rate Amounts
Unreported Amount 40/100
① Penalty tax on Intentional
Gross Revenue 14/10,000
failure to file
returns Unreported Amount 20/100
Unintentional
Under-reported 40/100
② Penalty tax on Intentional
under-reporting of Gross Revenue 14/10,000
income
Unintentional Under-reported 10/100
③ Excessive refund Intentional Excessive Refund 40/100
claim Unintentional Excessive Refund 10/100
④ Penalty for unfaithful Sum of Days Unpaid ( )
payment(refund) 3/10,000
Amounts Unpaid
Withholding Failure to submit Non-submission Amt. 2/100
receipts Late submission Amt. late submitted 1/100
Failure to issue Value of supply 1/100
⑤ Penalties Payment record
on Inaccurate Inaccurate Amount 1/100
unfaithfu Sum table of Failure to submit Value of supply 1/100
l invoice Late submission Amt. late submitted 0.5/100
report
Sum table of tax Failure to submit Value of supply 1/100
invoice by each
supplier Late submission Amt. late submitted 0.5/100
Sub Total
⑥ Failure to gather relevant tax invoices Unsupported 2/100
Failure in submitting Unreported Amount 1/100
⑦ List of invoices
Obscurity in Submitting Obscure Amounts 1/100
⑧ Unfaithful report on Failure to file Gross Revenue 0.5/100
business profile Under-reporting Gross Revenue 0.5/100
⑨ Unfaithful Failure to register Gross Revenue 0.5/100
registration of /Fraudulent register
co-invested business Fraudulent registration of
place profit allocation ratio Gross Revenue 0.1/100
⑩ Failure to maintain adequate books and records Calculated Tax Amount 20/100
⑪ Failure to use Failure to open/register Gross Revenue 0.2/100
business purpose bank
account Failure to use Unused Amount 0.2/100
⑫ Failure to issue Non-issuance Amount 5/100
receipts of credit
card sales Number of Non-issuance 5,000won
Stores not issuing Gross Revenue 0.5/100
⑬ Non-issuance of cash Non-issuance Amount 5/100
receipts
Number of Non-issuance 5,000won
⑭ Unfaithful report of Unfaithful issuance Unfaithful Amount 2/100
donation receipts Failure to record/maintain Unrecorded Amount 0.2/100
⑮ Penalty allocated to
partnership
ꊘ Total Amount
ꊉ
󰊬 Details of Tax Prepaid
󰊝
Classification Income Tax Special Tax for Rural
Development
Interim Prepayment for Global Income ①
Tax paid on filing of Provisional margins from sale of land etc. ②
Tax amount pre-noticed of Provisional margins from sale of land etc. ③
Tax occasionally assessed ④ ꊓ
ꊊ
Interest Income ⑤ ꊊ
ꊔ
Dividend income ⑥ ꊕ
ꊊ
Tax withheld and Tax collected Business income ⑦ ꊖ
ꊊ
by Taxpayer association Wage & salary income ⑧ 4,187,500 ꊗ
ꊊ
Pension income ⑨
Other income ⑩ 1,600,000
W ithholding tax allocated to partnership ꊓ
ꊉ ꊘ
ꊊ
Total tax amount prepaid ꊔ
ꊉ 5,787,500 ꊙ
ꊊ
Part Ⅴ
Fo r m s
Individual Incom e T ax and B enefit G uide for Foreigne rs 2009 103
[Form 40 ⑴] (page 1)
(For the year of ) Final Return of Tax Base and Computation of Global Income Tax,
Special Tax for Rural Development and Inhabitant Tax to be paid
◇ When a taxpayer, who are subject to Simplified Expense Rate, having either real estate rental
income and business income accruing from a single business place does not keep books and
records and files his/her return by estimate based on Simplified Expense Rate, he/she shall
prepare [Form 40 (4)] : Single Income - For Taxpayer subject to Simplified Expense Rate.
◇ When a taxpayer subject to Simplified Bookkeeping(excluding new business starters and
business owners with revenue incomes of the previous year less than 48million won) does
not file his/her return by bookkeeping, he/she is liable to pay 20% of the calculated tax
amount additionally as the penalty for non-bookkeeping.
◇ When a taxpayer, who is liable for Double Entry Bookkeeping(excluding new business
starters and business owners with revenue incomes of the previous year less than 48million
won) does not file his/her return by bookkeeping by double entry, he/she is liable to pay
20% of the calculated tax amount or 0.07% of Gross Revenue additionally, whichever is
greater, as the penalty for failure to File Returns.
< Fill out the forms by the following order>
1. ❶Fill out block Basic Information (In box ②, A foreigner shall enter his/her Alien Registration Number)
2. ❸Fill out block Tax Attorney, when you have a tax attorney prepared this form,
3. ❺ ~ ❽ Each Income Statement to be prepared (only when needed)
4. ❾Details of Global Income, Deficit and Deficit Carried Over Deduction and 󰊝 󰊦Statement of Deficit
Carried Over (󰊝󰊦Statement of Deficit Carried Over is prepared when Deficit Carried Over exists)
5. Fill out the block 󰊝
󰊧Details of Exemptions and Deductions
󰊨Details of Tax Exemptions, the block 󰊝
󰊩Details of Tax Credits and the block
󰊪Details of Reserves (Only a necessary statement is to be made)
󰊝
󰊫Details of Penalty Taxes
󰊬Details of Tax Prepaid
9. Fill out the block ❹Computation of Income Tax[If you have financial income, you should first fill
in the form, "ꊝꊭ Calculation of Global Tax on Financial Income", on page 21. If you prepare a
statement of estimated income amount according to Standard Expense Rate, you should first fill
out the form, "ꊝ ꊮ Statement of Estimated Income Amount (only for the taxpayer subject to
Standard Expense Rate)", on page 23. As a career house trader, if you have gains from
transactions of 2 or 3 houses, you should first fill in the form of "ꊝ ꊯ Global Income Tax
Calculation (for career house trader) on page 25. If you have both financial incomes included in
income and gains from transactions of 2 or 3 houses, you should fill in the form of "ꊞ ꊦ
Calculation of Global Tax on Financial Income (taxpayer having both financial income and gains
from transaction of house)" on page 27].
10. Fill out the block ❷Bank Account for Tax Refund. If an amount of tax refunded is 20 million or
more, file a tax return with an application of bank account opening(changing) with which a copy
of bank account is attached.
11. If all lines of each schedule is filled with in full, use accompanying paper(s).
12. Taxpayer's name shall be recorded with his/her signature or seal.
Receipt (For the year of Final Return of Tax Base for Global Income Tax)
Name Address
※ Attachments Receiver
1. Balance Sheet ( ) 2. Profit & Loss Statement including Accompanying Documents ( )
3. Trial & Balance Sheet ( ) 4. Statement of Income Adjustment ( )
5. Statement of Income Allowances ( ) 6. Refund application for Deficit Retroactive Deduction ( ) Filing Date
7. Tax Deduction and Exemption Application pursuant to Tax Incentive and Limitation Law( )
8. Other Documents attesting the contents of the return ( )
104 P a rt Ⅴ . Form s
Instructions
1. Do not fill out the shaded box.
2. 󰊓
󰊊Amount of Global Income : Enter figures shown in line ⑤(Total Global Income) of the block ❾
Details of Global Income, Deficit and Deficit Carried Over Deduction.
ꊔTotal Income Allowances : Enter figures shown in line 󰊊
3. ꊊ 󰊚 of the block ꊝ
ꊧ Details of Exemption and Deductions.
4. ꊊ
ꊕTax Base : ꊊ
ꊓAmount of Global Income - ꊊ
ꊔTotal Income Allowances
5. ꊖꊊTax Rate & ꊊ ꊗTax Calculated : An amount of tax calculated comes with following sequences;
Multiply tax base by tax rate in the table of basic tax rates. If there are interest․dividend income
subject to global taxation, use "Calculation of Global Tax on Financial Income" on page 21 to
calculate ꊊ
ꊖ & ꊊꊗ. If the taxpayer is a career house trader affected by Article 64 of the Income Tax
Act, use "Global Income Tax Calculation Form (for career house trader) on page 25. If the taxpayer
is a career house trader who has financial income, use "Calculation of Global Tax on Financial
Income (for taxpayers having both financial income and gains from transaction of house) on page 27.
6. ꊘ
ꊊTotal Tax Credit & ꊊ ꊙTotal Tax Exemption : To apply for Total Tax Credit and Total Tax
Exemption, enter figures shown in line ⑤Total of Tax Exemptions of the block ꊝ ꊨDetails of
Tax Exemptions or in line ⑤Total of Tax Credits of the block ꊝ
ꊩDetails of Tax Credits.
7. ꊛ
ꊊ & ꊍ ꊗ Penalties : Enter penalties pursuant to Article 81, 158 and 159 of the Personal Income
Tax Law and from Article 47-2 to 47-5 of the Framework Act on National Taxes. Fill in ꊊ ꊛ
with figures shown in line ⑦ Total of ꊝꊫDetails of penalty taxes.
8. ꊒ
ꊋ & ꊍ ꊘ Recapture : For the recapture as prescribed by the Tax Incentive and Limitation Law,
prepare the Form 51 for the Recapture, and then fill the line ꊋ
ꊒ with figures in line 4 of [Form
51]. Fill ꊍ
ꊘ for tax refunded.
9. ꊋ
ꊔ & ꊍ ꊘ of the block ꊝ
ꊚTax Prepaid : Enter figures from lines ⑪․ꊊ ꊬDetails of Tax Prepaid.
10. ꊕ
ꊋ Earned Income Tax Credit: Enter figures of "❺ Amount requested as earned income tax
credit" from the earned income tax credit application form (for tax reassessment․revision, enter
figures of "❼ refund money of earned income tax credit").
11. The amount of tax payable, which is over 10 million won, could be paid in installments (if the
tax amount payable is less than 20 million won or 20 million won, the amount in excess of 10
million won can be paid in installment and if the amount payable is over 20 million won, the
half or less than half of the tax amount can be paid in installment within 2 months of the due
date for payment.), for installments, fill out the line ꊋ
ꊗ with the amount of installment, and the
amount payable within the due date(ꊋ ꊖ－ꊋ ꊗ) for payment is recorded in the lineꊋ
ꊘ.
12. For the Tax Base of Inhabitant Tax, fill in line ꊌ
ꊓ with the figures of Total Global Income(ꊋ
ꊓ)
and calculate the tax by multiplying tax rate(10%) in the line ꊌꊕ. Tax Prepaid(ꊌꊖ) = [Prepaid
Income Tax(ꊋ ꊔ) - Interim Payment(the line ① of ꊝꊬ Details of Tax Prepaid)] ×10%
13. Special Tax for Rural Development is only subject to tax for taxpayers who received an
exemption under the Tax Incentive and Limitation Law. The Tax Base(ꊍ ꊓ) is carried over from
the line ꊉ
ꊚ of [Form 68(The Table on Total Exempted Tax for the Special Tax for Rural
Development)] and the amount of tax is calculated by applying the tax rate(20% or 10%) under
Article 5 of the Special Tax for Rural Development Law. Fill in line ꊍ ꊙ with the figures [ꊍ
ꊖ +
ꊗ - ꊍ
ꊍ ꊘ]. When the Income Tax is paid in installments, Special Tax for Rural Development can
be paid in installments according to the proportion of installment in income tax.
Table of Basic Tax Rates

Attributable year For the year of 2008 For the year of 2009 For the year of 2010
Tax Base
Not more than 12,000 8% of Tax Base 6% of Tax Base 6% of Tax Base
Over 12,000 17% of Tax Base - 16% of Tax Base - 15% of Tax Base -
Not more than 46,000 1,080,000 1,200,000 1,080,000
Over 46,000 26% of Tax Base - 25% of Tax Base - 24% of Tax Base -
Not more than 88,000 5,220,000 5,340,000 5,220,000
35% of Tax Base - 35% of Tax Base - 33% of Tax Base -
Over 88,000
13,140,000 14,140,000 13,140,000
Residency Resident1/Non-resident2
Control (For the year of ) Final return of Tax Base and
－ Computation of Global Income Tax, Special Tax for Nationality Citizen1/Foreigner9
No
Rural Development and Inhabitant Tax to be paid Application of Flat tax rate Yes 1 / No 2
State of State Code
Residence
① Name ② Alien Reg. No. －
City, Gu, City, Dong, Eup, Stree Beo Ho Apt., Building Dong Ho
③ Address Province Goon Myeon t, Ri nji etc.
④ Home phone No. ⑤ Business phone No.

⑥ Mobile phone No. ⑦ E-mail address
ꋄ Self adjustment
ꊺ ꋅ External adjustment
ꊺ ꋃ Simplified bookkeeping
ꊻ
⑧ Type of Return ꊼ ꋄEstimate-Standard rate ꊼ ꋃNon-business 󰊾
ꋅEstimate-Simplified rate ꊽ 󰋃Additional Return
⑨Classification by Scale 󰊱 Double entry bookkeeping 󰊲 Simplified bookkeeping 󰊳 Non-business
⑩Return Classification ꊺ ꋃ Regular ꊻ ꋃ Amended declaration ꊼ ꋃ Claim for correction ꊽ
ꋃ Return after due date
❷ Bank Account for Tax Refund ⑪ Name of Bank ⑫ Account No.
⑭Business ⑮Phone
⑬Name - -
Registration No. No.
❸Tax
Attorney ꊉ ꊘ 󰊱 Bookkeeping and return ꊙ
ꊉ ꊚ
ꊉ
Type of 󰊲 Adjustment for taxable income Control - Designa －
assignment 󰊳 Preparing return No. ted No.
❹Computation of Income Tax
Global Income
Classification Tax Inhabitant Tax Special Tax for Rural Development
Amount of Global Income ꊓ

ꊊ
Total Income Allowances ꊔ
ꊊ
Tax Base ( ꊊ
ꊓ-ꊊ
ꊔ) ꊕ
ꊊ ꊓ
ꊌ ꊓ
ꊍ
Tax Rate ꊖ
ꊊ ꊔ
ꊌ 10% ꊔ
ꊍ
Tax Calculated ꊗ
ꊊ ꊕ
ꊌ ꊕ
ꊍ
Total Tax Exemption ꊘ
ꊊ
Total Tax Credit ꊙ
ꊊ
Tax Determined ( ꊊ
ꊗ-ꊊ
ꊘ-ꊊ
ꊙ) ꊚ
ꊊ ꊖ
ꊍ
Penalty taxes ꊛ
ꊊ ꊗ
ꊍ
Recapture
(Refunded tax amount for Special Tax for ꊒ
ꊋ ꊘ
ꊍ
Rural Development)
Total ( ꊊ
ꊚ+ꊊ
ꊛ+ꊋ
ꊒ) ꊓ
ꊋ ꊙ
ꊍ
Tax Prepaid ꊔ
ꊋ ꊌ
ꊖ ꊚ
ꊍ
Earned Income Tax Credit ꊕ
ꊋ
Tax Refundable / Tax Due(ꊋ
ꊓ－ꊋ
ꊔ-ꊋ
ꊕ) ꊖ
ꊋ ꊗ
ꊌ ꊛ
ꊍ
Bala Tax Payable in Installments (within 2 months) ꊗ
ꊋ ꊒ
ꊎ
nce
Tax Payable(ꊋ
ꊖ－ꊋ
ꊗ) ꊘ
ꊋ ꊌ
ꊘ ꊓ
ꊎ
I declare that I have examined this form and to the best of my knowledge and belief, it is
true, complete, and is accordance with Article 70 of the Personal Income Tax Law, Article
7 of the Special Tax for the Rural Development Law and Article 177-4 of the Local Tax
Law and Article 45 through 45-3 of the Framework Act on National Taxes.
200 . . .
Taxpayer signature
I, as a licensee of tax professional, filled out above tax return fair Date of Receipt
and honestly.
Tax agent (Signature/Stamp)
Attachments : Refer to Instruction of page 1 Computerized (Signature)
entry required
Instructions for Preparing ❺ Details of Interest Income
1. Filers are not obliged to fill out this form if their interest income subject to non-taxation or
separate taxation under the Income Tax Law and the Tax Incentive and Limitation Law. Filers
shall fill out this form if their financial income exceeds 40 million won with interest income
(overseas financial income) included
* Filers shall enter financial income worth not more than 40 million won if the interest income(ex.
financial income from foreign countries) is not withheld domestically.
2. ①Income Classification Code : Enter the income classification codes mentioned above(11 ~ 16) in
numerical order.
(1) Income Classification Code 11 : Interest from non-commercial loans prescribed by Article 16 ① (12)
of the Income Tax Law
(2) Income Classification Code 12 : “ Interest income free from withholding” as prescribed by
Article 127 of the Income Tax Law
(3) Income Classification Code 13 : Other interest income
(4) Interest income paid outside Korea and not subject to domestic withholding tax : 15
(5) Interest income derived from partnership: 16
3. ②Serial No. : Set number on each taxable interest income by the income classification code.
If the payer of interest income is more than two, write down the sum of income by classification
code in the last line.
4. ③ Company Name(Name)․④Tax Registration No.(Resident Registration No.) for those paying interest
5. ⑤ Taxable Interest Income : Write down the sum of annual interest paid by each income payer.
* Write down the amount of total interest before withholding.
6. ⑥Income Tax withheld : Write down the amount of tax withheld.

❺ Details of Interest Income
① Interest Payer
②
Income Serial ⑤ ⑥
Classi- ③ ④ Taxable Interest Income Tax
No.
fication Company Name Tax Reg. No. Income withheld
Code (Name) (Resident Reg. No.)
Instructions for Preparing ❻ Details of Dividend Income
1. Filers are not obliged to fill out this form if their dividend income is subject to non-taxation or
separate taxation under the Income Tax Law and the Tax Incentive and Limitation Law. Filers
shall fill out this form if their financial income exceeds 40 million won with dividend income
(overseas financial income) included
* Filers shall enter financial income worth not more than 40 million won if the dividend
income(ex. financial income from foreign countries). is not withheld domestically.
2. ① Income Classification Code : Write down the code above(21~29) in order.
(1) Dividend income subject to Gross-up : Income Classification Code 21
(ex. Interest income: 20 million won, Dividend Income: 50 million won (subject to Gross-Up),
box ⑤: 50 million won, box ⑥: 30 million won)
(2) Dividend income not subject to Gross-up : Income Classification Code 22
(3) Dividend income which is not withheld by Article 127 of the Income Tax Law : Income
Classification Code 23
(4) Dividend income paid outside Korea and not subject to domestic withholding tax : 26
(5) Dividend income of a co-investor as described by (17) (1) (6-3) of the Personal Income Tax Law : 28
(6) Dividend income derived from partnership : 29
3. ② Serial No. : Write down serial no. on each dividend income by the income classification code.
If the number of each code is more than two, write down the sum of income by the
classification code in the last line.
4. ③ Company Name․④Tax Registration No. : Write down the name and tax registration no. for
the company paying interest.
5. ⑤ Dividend Income : Write down the annual dividend income before tax withholding by each
dividend paying company.
6. ⑥ Dividend Income for Gross-up: write the amount exceeding 40million won if the total amount
of other interests and dividend income(not subject to gross-up) exceeds 40 million won. (ex.
Interest income 20 million won, dividend income 50 million won( subject to gross-up), 50 million
won in box ⑤, and 30 million in box ⑥
(ex. Interest income: 20 million won, Dividend Income: 50 million won (subject to Gross-Up),
box ⑤: 50 million won, box ⑥: 30 million won)
7. ⑦ Gross-up Amount : Dividend Income for Gross-up(⑥) × 15%
8. ⑧ Taxable Income : Dividend Income(⑤) + Gross-up Amount(⑦)
9. ⑨ Income Tax Withheld : Enter the amount of tax withheld.
❻ Details of Dividend Income
Payer Gross-Up
① ③ Company Name ⑧
② ⑤ ⑨
Income Taxable
Serial ⑥ ⑦
Classi- Dividend Income Tax
fication Dividend Gross-up Income
No. Income Income for Amount withheld
Code ④Tax Registration No.
(⑤+⑦)
Gross-up (⑥×15/100)
Instructions for Preparing ❼ Details of Real Estate Rental Income and Business Income
1. ①Income Classification Code : Choose appropriate code (30ㆍ31ㆍ40ㆍ41) from below.

(1) Real Estate Rental Income : 30 (2) Real Estate Rental Income Derived from partnership: 31
(3) Business Income : 40 (4) Business Income Derived from partnership: 41
2. ②Serial No. : Set a serial no. by business place regarding the real estate rental income and the
business income. If the number of business place is more than two, write down the real
estate rental income, the sum of the real estate rental income, the business income, and the
sum of the business income by sequence.
3. ③Enter “1” if the business place is in Korea. Enter “9” if the business place is outside Korea.
Enter country code of busines place as designated by the International Organization for
Standardization. e.g., Republic of Korea : KR, United States: US
4. ⑧Gross Income Amount and ⑩Income: A Taxpayer with by-job income of farmhouse
(non-taxable business income) must enter the income in box ⑰ of「Tax Form 37-3⌟
5. ⑥Code for Type of Return : Write down the code number below according to the type of
return, which are attached in the final tax return.
(1) Self-adjustment : 11
(2) External-adjustment : 12
(3) Compliant tax payment: 13
(4) Calculation of Income Amount by Simple Bookkeeping Income Amount Calculation: 20
(5) Calculation of Income Amount by Standard Expense Rate : 31
(6) Calculation of Income Amount by Simplified Expense Rate : 32
6. ⑦Main Code of Kind of Business : If the number of code falling under related type and items
of business is more than two, write down the main code of kind of business.
7. ⑨Necessary Expenses : When you file a return using Standard Expense Rate, enter the column
󰊘total of Necessary Expenses in Statement of Estimated Income Amount on page 23.
󰊉
However, when ⑩income amount is 󰊊 󰊒Alternative Income Amount of the Statement of
Estimated Income Amount, enter 「⑧Gross Revenue-⑩Income Amount」.
8. ⑩Income : ⑧Gross Revenue - ⑨Necessary Expenses (A taxpayer subject to Standard Expense
Rate shall enter 󰊊
󰊓Income Amount of ꊝ
ꊮthe Statement of Estimated Income Amount above.)
9. In boxes ⑪ and ⑫, the self-employed keeping their business going: shall write Jan, 1 of the
current year as beginning date of taxation period, and December 31 of the current year as
closing date of taxation period. As for new starters and closed businesses, enter a beginning
date or a shutdown date of business. As for Co-ownership, enter the business commencement
and withdrawal date of a member for that year.
10. ⑬ Representative Co-owner : For joint business, write down the name and identification number
of primary income earner.
11. ⑭ Related Party : In case partners are related to each other, the income of the related party is
attributed to the main partner whose share of stocks or the ratio of income allocation is bigger
than others. For the aggregate income return for the related party, write down the name and
identification number of the related party under Article 100-4 of the Presidential Decree of the
Personal Income Tax Law.
12. ⑮Serial No. : Set a serial No. for withholding agent(company) and tax association.
13. ⑯Company Name (Name)․⑰Tax Registration No. (Resident Registration No.) of withholding
agent or taxpayer association
14. 󰊚
󰊉 Income Tax and󰊉 󰊛Special Tax for Rural Development : Write down the annual amount of tax
collected and the tax collected by taxpayer association or the special tax for rural development.
❼ Details of Real Estate Rental Income․Business Income
① Income Classification Code
② Serial No.
③
Place Location
of
busine Domestic1/ State code of
ss Overseas9 location
④ Company Name
⑤ Tax Registration No.

⑥ Code for Type of Return
⑦ Main Business Code
⑧ Gross Income Amount
⑨ Necessary Expenses
⑩ Income(⑧-⑨)
⑪Beginning Date of Taxable Period

⑫Closing Date of Taxable Period
⑬ Repre- Name
sentative Alien[Resident]
Co-owner Registration No.
Name
Alien[Resident]
Registration No.
⑭ Name
Related Alien[Resident]
Party Registration No.
Name
Alien[Resident]
Registration No.
Tax Withheld and the tax collected by taxpayer association for business income
Tax withheld or the tax collected by taxpayer
⑮ Withholding Agent or Taxpayer Association association
Serial
No. ⑯ Company Name ⑰ Tax Registration No. 󰊛 Special Tax for Rural
󰊉
󰊚Income Tax
󰊉
(Name) (Resident Reg. No.) Development
[Form 40 ⑴] (Page 10)
Instructions for Preparing ❽ Details of Wage & Salary Income, Pension

Income and Other Income
1. Exclude non-taxable income and the income subject to the separate taxation.
2. ①Income Classification Code : Choose appropriate codes from below.
○ The classification code of wage & salary income
(1) Class A wage & salary income(domestic, excluding wages and salaries received from the
U.S. Armed Forces in Korea and foreign earned income) : 51
(2) Wages and salaries received from the U.S. Armed Forces in Korea : 52
(3) Foreign earned income(the income in consideration of supplying labors furnished abroad) : 53
(4) Class B wage & salary income of the member who joined taxpayer association : 55
(5) Class B wage & salary income(Class B wage & salary income incurred from the exercise
of stock option granted by foreign companies) : 56
(6) Class B wage & salary income besides (4) and (5) : 57
* Class B wage & salary income is referred as wages and salaries received from a foreign
agency, the U.N. Forces in Korea (excluding the U.S. Armed Forces), a foreigner or
foreign corporation outside Korea, excluding those claimed as a deductible expense for a
Korean place of business of a non-resident or a foreign corporation.
○ Pension Income : 66
○ Other income : 60
○ Other income derived from partnership: 61
3. ②Serial No. : Set a serial no. by each code. If the number of code is more than two, write down
the sum of income by classification code in the last line.
4. ③ Write down the Company Name (Name)․④Tax Registration No.(Resident Reg. No.) of those
who are paying wage & salary income, pension income, other income. But the labor having
Class B wage & salary shall write down the name or tax registration no. of foreign head
quarter, domestic branch, liaison office, foreign invested company which gave the stock option
concerned income from stock option exercised.
5. ⑤Write down an annual Gross Receipt by each income payer.
6. ⑥Necessary Expenses : For wages and Salaries, write down the amount of earned income
deduction, which is deducted from the wages and salaries income accrued in main working place
if working place is more than two. but in case where the amount of wages and salaries is less
than earned income deduction, the excess amount can be carried over to be deducted from the
secondary working place.
7. ⑦ Taxable Income : ⑤Gross-Receipt - ⑥Necessary Expenses
8. ⑧ Income Tax & ⑨Special Tax for Rural Development : Write down the tax withheld and the
tax collected by taxpayer association.
[Form 40 ⑴] (Page 11)
❽ Details of Wage & Salary Income, Pension Income, and Other Income
Tax withheld or the

Payer
① ② ⑦ tax collected by
(Domestic working place) ⑤ ⑥
Income taxpayer association
Taxable
Classi- Serial Gross Necessary
③ Company Name (Name) Income ⑧ ⑨ Special
fication
No. Receipt Expenses (⑤-⑥) Income Tax for Rural
Code ④ Tax Reg. No.
(Resident Reg. No.) Tax Development
[Form 40 ⑴] (Page 12)
Instructions for Preparing ❾ Details of Global Income, Deficit and Deficit

Carried Over Deduction
1. ①Amount of Income by Income Classification : Enter figures shown in the line ⑤(the sum of
taxable interest income) of the schedule ❺(page 5), the line ⑧(the sum of taxable income) of
the schedule ❻(page 7), Dividend income paid to a co-investor as prescribed by Article 17① 6-3
of the Income Tax Law, the line ⑩(the sum of real estate rental income and business income)
of the schedule ❼(page 9), and the line ⑦(the sum of taxable income) of the schedule ❽(page
11). Write down “0” if the sum of the real estate rental income shows deficit(-), and the amount
of deficit of the real estate rental income will be carried over in the line(②) of the schedule ꊝ
ꊦ
(page 13).
2. ②Business Deficit Deducted : The amount of deficit for business income is deducted from each
income in following sequence, real estate rental income, wage & salary income, pension income,
other income, interest income, and dividend income subject to global income tax(not deducted
from interested income and dividend income subject to withholding tax rate). Taxpayers decide
both the amount of deficit to be deducted and whether the deficit or the deficit carried over is
deducted from interest income or dividend income as prescribed by Article 45 ⑤ of the Personal
Income Tax Law.
3. ③Deficit Carried Over Deduction for Business Income : The amount of deficit carried over is
deducted from each income in following sequence, business income, real estate rental income,
wage & salary income, pension income, other income, dividend income, interest income subject to
global income tax(not deducted from interested income and dividend income subject to
withholding tax rate).
4. ④Deficit Carried Over deduction for Real Estate Rental Income : Write down the deficit of real
estate rental income which is deducted from real estate rental income.
5. ⑤Income after Deficit / Deficit Carried Over : ① - ② - ③ - ④
* In case where the business income is under zero(when the amount of deficit still remains,
after deducted from other incomes just like ② above), write down “0” and the amount left
after deduction is written down in the line ② in ꊝ
ꊦStatement of Deficit Carried Over.
Instructions for Preparing ꊝ

1. ①Taxation Period Accrued․②The Amount Accrued : The deficit carried over, which was incurred in
previous 5 taxation periods and the current taxation period, shall be written down in sequence of
each taxation period.
2. ③Write down the amount of deduction by previous taxation period
3. ④Write down the current deduction in the line : deduct the first incurred deficit carried over first in
sequence.(The total amount of the current deduction is the sum of ④ or ③ in the ❾Details of
Global Income, Deficit and Deficit Carried Over Deduction
4. ⑤Write down the retroactive deduction(or the deficit carried over in line ⑫ of [Form (40-4)] in case
where small and medium sized business by Article 2 of the Tax Incentive and Limitation Law
applies for retroactive deduction which is incurred in current taxation period under Article 85-2 of
the Income Tax Law,
5. ⑥Other deduction : Write the amount in case that the deficit carried over is appropriated as gain
from assets contributed or gain from discharge of indebtedness.
6. ⑦Balance : Write down the amount of accrued deficit carried over which is left after deduction(②-③-④
-⑤-⑥)
[Form 40 ⑴] (Page 13)
❾ Details of Global Income, Deficit and Deficit Carried Over Deduction
① Deficit Carried Over Deducted ⑤

Amount of ② Business Income after
③Deficit Carried ④Deficit Carried
Classification Income by Deficit Deficit /
Over Deduction Over Deduction
Income Deducted Deficit Carried
for Business for Real Estate
Classification Over
Income Income
Interest Income
Dividend Income
Dividend income paid to a
Co-investor (Article 17(1)⑥-3
of the Income Tax Act)
Real Estate Rental Income
Business Income
Wage & Salary Income
Pension Income
Other Income
Total Global Income

ꊝ
Deficit carried over ③ Amount Current Deduction

Classi- Deducted by ⑦
① Taxation ② ④ ⑤ ⑥
fication Pre- Taxation Balance
Period Amount Current Retroactive Other
Period
Accrued Accrued Deduction Deduction Deduction
Real
Estate
Rental
Income
(30)
Business
Income
(40)
[Form 40 ⑴] (Page 14)

※ Personal Deductions and Special Deductions should be entered based on the Following [Form 37], and exemptions
and deductions under the Tax Incentive and Limitation Law should also be based on the related Form.
1. Personal Deductions (①~⑨)
가. ①Basic Deduction : 1,000,000 won per capita is deductible(number of persons × 1,000,000 won) for yourself
and family with annual income not more than 1,000,000 won.(Article 50 of the Income Tax Law).
나. ②Additional Deduction(③～⑧) : 1,500,000 won is additionally deductible for an eligible person for basic deduction
aged 70 or older(③), 1,000,000 won is additionally deductible for an eligible person for basic deduction aged 65 or
older(④), and 2,000,000 won will be additionally deductible for handicapped persons(⑤). 500,000 won will be
additionally deductible for a resident who is a woman having no spouse and a head of the family or is a woman
having the spouse(⑥). 1,000,000 won per descendants, adoptees or foster children(⑦) of six or less years of age
is also additionally deductible.(⑧) 2,000,000 won per capita is additionally deductible for the newborn (lineal
descendant) and the newly adopted for the tax period.(Article 51 of the Income Tax Law).
다. ⑩Additional deduction for households with multiple children : If the number of children eligible for basic deduction
is 2, enter 500,000 won. If the number of eligible children is 3 or more, enter the sum of 500,000 won for the first
and second child combined and 1 million per child from the 3rd child.(Article 51-2 of the Income Tax Law)
2. ⑫~⑬ The amount of contribution(excluding employer liability) shall be deducted if a resident pays national
pension premium according to the National Pension Act. The amount of contribution shall be deducted from
⑬ if a resident pays employee contribution according to the other pension acts or the Special Post Office
Act(Article 51-3 of the Income Tax Law).
3. ⑭Deduction for Reverse Mortgage Interest: If you are a resident who has a retirement income and receives reverse
mortgage, you are entitled to the deduction for interest accruing for the year on the mortgage with a limit,
whichever is smaller: 2,000,000 won or the amount of mortgage income.(Article 51-4 of the Income Tax Law)
4. 󰊉󰊗Retirement Pension Deduction: Deductible for the sum of monthly contributions (The Law on Ensuring
Employee Retirement Payment) and total savings deposits (Article 86-2 of the Tax Incentive and
Limitation Law), with a combined limit of 3,000,000 won per year.
5. Special Deductions (󰊉 󰊘～ꊊ ꊕ)
(1) 󰊉󰊘Insurance premium deduction, 󰊉 󰊙Medical expenses deduction, 󰊉 󰊚Educational expenses deduction and
⑲Housing Fund Allowances are deducted from the amount of labor income only(excluding the wages
of daily workers)(Article 52 ①～⑤,⑩ and ⑭ of the Income Tax Law).
(2) ⑳Deduction for donations: Fill out the form 45 of the Statement of Donation first and then ⑲Deduction
for donations. Deduct certain amount within the deduction limit below from donations which are not included
in the necessary expenses of business income or real estate rental income according to donation codes below.
However, enter the deducted amount for donations regarding code 10, 40, 41 of the Statement of Donations on
this form and enter the deducted amount for donations regarding code 20, 21, 30, 31, 42 of the Statement of
Donations on "Income deduction" under the Restriction of Special Taxation Act.
➀Donations regarding code 10, 20, 21 of the Statement of Donations: global income amount
➁Donations regarding code 30, 31: (Global income amount－➀Deducted amount for donations )× 50%
➂Donations regarding code 42: (Global income amount－➀～➁ Deducted amount for donations)× 30%
④Donations regarding code 40, 41: (Global income amount－➀～➂Deducted amount for
donations)×10%+[the lesser between (Global income amount－➀~➂Deducted amount for
donations)×5% and donations regarding code 40]
(3) ꊊ ꊓAdditional deductions of marriage, funeral service and moving expenses: 1,000,000 won is
additionally deductible for the expense of marriage, funeral service and moving of resident whose gross
wage income is not more than 25 million won.
(4) ꊊ ꊔStandard deduction : If a resident with labor income has no deductions of 󰊉 󰊘～ꊊ ꊓ, 1 million of deduction is
granted in case the taxpayer is a compliant taxpayer as specified in §52 ⑪ of the Personal Income Tax Law and
has global income; and 600,000 won of standard deduction is granted in case the taxpayer has global income and
is not a compliant taxpayer or does not have any wage and salary(Article 52 ⑪ of the Personal Income Tax Law).
6. 󰊊󰊖Dependents Deduction: List names and required information of the filer and his/her dependents eligible
for basic income tax deduction. In box Citizen/Foreigner, a resident shall enter “1” and a foreign “9”. In
box resident(alien) Registration No., a foreigner shall enter alien registration number.
7. Exemptions and Deductions under the Tax Incentive and Limitation Law(󰊊 󰊗~󰊊 󰊛) : The column 󰊊 󰊗 is for
the related Article of the Tax Incentive and Limitation Law and the column ꊊ ꊙ is for the deduction
amount. And the column ꊊ ꊚ is for taxpayer's identification number if the deduction is for business
income(i.e. deductions for cattle raising business). ꊊ ꊘCode : Leave it blank.
8. When a businessman who has business income uses double bookkeeping regime and etc. and is qualified to
receives deduction for medical expenses and education expenses according to Article 122-3 of the
Restriction of Special Taxation Act, each deducted amount from medical expenses and education expenses
shall be entered into "Income deduction" under the Restriction of Special Taxation Act.
[Form 40 ⑴] (Page 15)

ꊝ
Exemptions and Deductions under the Income Tax Law
Personal Deduction Special Deductions

① Basic Deduction ( ) 󰊘 Insurance Premium Deduction
󰊉
③ Person who is 70 󰊙 Medical Expenses Deduction
󰊉
years or older ( )
④ Person who is 70
years or older ( ) 󰊚 Educational Expenses Deduction
󰊉
②
⑤ Handicapped Person ( ) 󰊛 Housing Fund Allowances
󰊉
Additional
Deduction ⑥ Female Worker ( ) ⑳ Deduction for Donations
(In person) ⑦ Lineal descendant less than ꊓ Marriage ․ Moving ․ Funeral
ꊊ
6 years of age ( )
⑧ New born/newly adopted( )
⑨ Total (③ ～ ⑧)
⑩ A d d itio n al d ed u ctio n fo r
households with multiple children
⑪ Total of Personal Deduction
(①＋⑨+⑩) ꊔ Standard Deduction
ꊊ
ꊔ National Pension Premium
ꊉ ꊕ
ꊊ
Deduction Individual having wage
Total or salary
⑬ Other Pension Premium of (󰊉
󰊘~ꊊ ꊓ or ꊊ ꊔ)
Deduction Specia
⑭ Deduction for Reverse Mortgage Interest l Individual not having
Deduc wage or salary
󰊗 Retirement Pension Deduction
󰊉 tions (⑳+ꊊ ꊔ)
ꊖ List names of eligible dependents for deduction
ꊊ
Relatio Citize Relatio Citizen
n/ /
nship Name Forei Resident(Alien) Reg. No nship Name Foreig Resident(Alien) Reg. No
Code Code
gner ner
- -
- -
- -
- -
※ Relationship Code : Yourself=0 Linear ascendant of yourself=1, Linear ascendant of spouse=2,
spouse=3, Linear descendent=4, Brother and Sister=5, others=6 spouse of Linear
descendent=7 (Please state relationship to employee and spouse for 4, 5, 6, 7)
Exemptions and Deductions under the Special Tax Treatment Control Law
ꊗ Article of the Special Tax Treatment Control Law
ꊊ ꊘ Code
ꊊ ꊙAmount
ꊊ ꊚTax Reg No.
ꊊ
󰊛 Sum of Exemptions and Deductions under the Special Tax

󰊊
Treatment Control Law
Sum of Exemptions and

Deductions ꊘcode
ꊊ are not to be filled out by taxpayers.
󰊒(⑪＋ꊉ
󰊋 ꊔ＋⑬＋⑭＋󰊉 󰊗+ꊊ ꊕ＋󰊊
󰊛)
[Form 40 ⑴] (Page 16)
Instructions for Preparing 12 Details of Tax Exemptions and 13 Details

of Tax Credits
1. Application order of reductions or exemptions of tax or tax credits : If both the provisions
concerning the reductions or exemptions of the income tax and those concerning the tax credits are
applied, the order of application shall be as follows:
(1) Reductions or exemptions of the income tax in the taxable period concerned
(2) Tax credits for which the reductions carried forward is not recognized
(3) Tax credits for which the reductions carried forward is recognized. In this case, if there is a
tax credit amount accruing during the tax period concerned and the amount not deducted is
carried forward from the proceeding taxable period at the same time, the amount not
deducted and carried forward shall be deducted preferentially.
※ If the sum of the amount of reduction, exemption and tax credit exceeds the tax amount
payable, the amount in excess shall be considered not to exist. If the tax amount payable is
less than the minimum tax amount prescribed in Article 132 of the Tax Incentive and
Limitation Law, the short amount shall not be deducted. However in the case of the tax
credit for which the reduction carried forward is recognized, the tax credit amount can be
carried forward.
2. ①Article(title) of the Related Tax Law : Fill the column with Article(title) of the Income Tax
Law or the Tax Incentive and Limitation Law.
(1) Donation as political fund not more than 100,000 won is credited under Article 76 of the Tax
Incentive and Limitation Law
(2) Tax Credit for dividend
(3) If payment records are submitted directly through the National Tax IT Network, tax credits
under Article 104 (5) of the Tax Incentive and Limitation Law will be granted.
3. ②Code : Leave it as blank.
4. ③Tax Exemptions or Tax Credits : Enter the amount of reduction, exemption of tax or tax credit.
In the case of tax credit for which the deduction carried forward is recognized, include the amount.
And in the case of the tax credit which was not deducted in the current taxable period and then
carried forward, do not include the tax credit amount.
5. ④Tax Registration No. : Enter the tax registration number of the place of business where the
exemption or reduction of tax or tax credit accrued.
14 Details of Reserved Funds

1. ①Article(title) of the Tax Incentive and Limitation Law : Fill out Article(title) of the Tax
Incentive and Limitation Law which prescribes the allowance of the reserved amount.
(i.e.) Article 4 : Reserves for investment of small and medium sized enterprises
2. ②Code : Leave the column as blank.
3. ③Year & ④Amount :Enter the year and amount of the reserved amount.
4. ⑤Amount returned in the current year : Enter the amount which is returned this year and added
into the taxable amount. ⑥Accumulated amount returned : Fill out the accumulated amount up to
this year.
5. ⑦Tax Registration No. : Enter the tax registration number of the place of business where the
reserved funds accrued.
[Form 40 ⑴] (Page 17)
ꊨ Details of Tax Exemptions

ꊝ
ꊩ Details of Tax Credits

ꊝ
󰊪 Details of Reserved Funds

󰊝
Amount Deducted
Amount Added Back to
from the Taxable
①Article of the the Taxable Income ⑦
② Income
Restriction of Special Tax Registration
Code ⑥
Taxation Act ③ ④ ⑤ No.
Accumulated
Year Amount This Year
Amount
※ ②code are not to be filled out by taxpayers.

[Form 40 ⑴] (Page 18)

ꊫ Details of Penalty Taxes
1. ①,② Penalty for Failure to File Returns or Willful Under-report : Enter the larger of the
amounts calculated applying penalty rate on the under-reported or revenue(in case of
unreported).
2. ④ Penalty Tax on Non-payment or Underpayment(excess refund): Penalty rate is 0.03% of the
unpaid amount a day.
3. ⑥ Failure to Gather Relevant Tax Invoices : Penalty rate is applied on the amount corresponding
to the received amount, when evidence other than the regular evidential document is received.
4. ⑩ Penalty for No-Bookkeeping : A taxpayer subject to Simple Bookkeeping, with gross revenue
of over 48 million won during the preceding year, fails to keep book and file a estimate return
by Standard(Simplified) Expense Rate, enter the amount equivalent to 20/100 of the calculated
tax amount. A taxpayer liable for Double Entry Booking enters the larger of the Penalty on
Failure to File Return or the 20/100 of the calculated tax amount.
5. Penalties for failure to open/declare business-purpose bank accounts : When a taxpayer failed to
open/declare business-purpose bank accounts with the due date, the taxpayer has to pay, as
penalty, the bigger of the revenue earned during the un-opened/un-declared period and the amount
calculated by multiplying the money remained on the business-purpose accounts by 0.2/100.
5-1.Penalties for failure to use business-purpose bank accounts: When a taxpayer failed to use the
business-purpose bank accounts after opening/declaring them, the taxpayer has to pay, as
penalty, the amount calculated by multiplying the money remained on the accounts by 0.2/100.
6. ⑤Penalties for unfaithful report, ⑥lack of evidential document, ⑦failure to submit the
specification of receipt received, ⑧unfaithful report on business profile: Enter the amount of
penalty with a ceiling of up to 100 million won for one penalty according to the types of
violation. Willful violation of tax duty : no ceiling on the penalties to be entered
7. Penalties for failure to file, willful under-reporting, excessive refund claim, or unfaithful
payment(refund): Enter the half the amount of penalty, if a taxpayer meets the requirement of
§48 ② of the Framework Act on National Taxes.

ꊬ Details of Tax Prepaid
1. ①Interim Prepayment for Global Income : Write in the prepaid income tax amount.
2. ②Tax paid on filing or ③Tax amount pre-noticed of income from immovable property(land etc.) : Write
in the tax paid on filing of income from immovable property as a real estate dealer on Article 69 of the
Income Tax or tax amount of the same income by the tax office.
3. ④․ꊊ ꊓOccasional Assessment : Write in every income tax amount and the amount of special tax for
rural development occasionally assessed on the Income Tax Law and the Special Tax for Rural
Development.
4. ⑤ Interest income : Write in the total amount of ⑥ in ❺ Details of Interest Income.
5. ⑥ Dividend income : Write in the total amount of ⑨ in ❻ Details of Dividend Income.
6. ⑦ ․ꊊ ꊖBusiness income : Write in the total amount of 󰊉 󰊚 and 󰊉󰊛 in ❼ Details of Real Estate Rental
Income & Business Income.
7. ⑧ ․ꊊ ꊗWage & salary income : Write in the total amount of ⑧ and ⑨ regarding the Wage & Salary
Income of ❽ Details of Wage & Salary Income, Temporary Property Income, Pension Income, and Other
Income.
8. ⑨ Pension Income & ⑩ Other income : Write in the total amount of ⑧ regarding the Pension Income of
❽ Details of Wage & Salary Income, Pension Income, and Other Income.
9. ꊉ
ꊔㆍꊊ ꊙTotal tax amount prepaid : Write in the total income tax amount of ①～ꊉ ꊓ in ꊉꊔ, and the total
amount of Special Tax for Rural Development of ꊊ ꊓ～ꊊ ꊘ in ꊊ
ꊙ.
[Form 40 ⑴] (Page 19)

ꊫ Details of Penalty Taxes
ꊝ
Classification Calculation Base Target Rate Amounts
Intentional
① Penalty tax on Gross Revenue 14/10,000
failure to file
returns Unreported Amount 20/100
Unintentional
Under-reported 40/100
② Penalty tax on Intentional
under-reporting of Gross Revenue 14/10,000
income
Unintentional Under-reported 10/100
③ Excessive refund Intentional Excessive Refund 40/100
claim Unintentional Excessive Refund 10/100
④ Penalty for unfaithful Sum of Days Unpaid ( )
payment(refund) 3/10,000
Amounts Unpaid
Failure to submit Non-submission Amt. 2/100
Withholding receipts
Late submission Amt. late submitted 1/100
Failure to issue Value of supply 1/100
⑤ Payment record
Penalt Inaccurate Inaccurate Amount 1/100
ies on
unfait Sum table of Failure to submit Value of supply 1/100
hful invoice Late submission Amt. late submitted 0.5/100
report
Sum table of tax Failure to submit Value of supply 1/100
invoice by each
supplier Late submission Amt. late submitted 0.5/100
Sub Total
⑥ Failure to gather relevant tax invoices Unsupported 2/100
Failure in submitting Unreported Amount 1/100
⑦ List of invoices
Obscurity in Submitting Obscure Amounts 1/100
⑧ Unfaithful report on Failure to file Gross Revenue 0.5/100
business profile Under-reporting Gross Revenue 0.5/100
⑨ Unfaithful Failure to register Gross Revenue 0.5/100
registration of /Fraudulent register
co-invested business Fraudulent registration of
place profit allocation ratio Gross Revenue 0.1/100
⑩ Failure to maintain adequate books and records Calculated Tax Amount 20/100
⑪ Failure to use Failure to open/register Gross Revenue 0.2/100
business purpose bank
account Failure to use Unused Amount 0.2/100
⑫ Failure to issue Non-issuance Amount 5/100
receipts of credit
card sales Number of Non-issuance 5,000won
Stores not issuing Gross Revenue 0.5/100
⑬ Non-issuance of cash Non-issuance Amount 5/100
receipts
Number of Non-issuance 5,000won
⑭ Unfaithful report of Unfaithful issuance Unfaithful Amount 2/100
donation receipts Failure to record/maintain Unrecorded Amount 0.2/100
⑮Penalty allocated
t o p a r t n e r s h i p
ꊘ Total Amount
ꊉ
ꊬ Details of Tax Prepaid
ꊝ
Classification Income Tax Special Tax for Rural
Development
Interim Prepayment for Global Income ①
Tax paid on filing of Provisional margins from sale of land etc. ②
Tax amount pre-noticed of Provisional margins from sale of land etc. ③
Tax occasionally assessed ④ ꊓ
ꊊ
Interest Income ⑤ ꊊ
ꊔ
Dividend income ⑥ ꊕ
ꊊ
Tax withheld and Tax collected Business income ⑦ ꊖ
ꊊ
by Taxpayer association Wage & salary income ⑧ ꊗ
ꊊ
Pension income ⑨
Other income ⑩
W ithholding tax allocated to partnership ꊓ
ꊉ ꊘ
ꊊ
Total tax amount prepaid ꊔ
ꊉ ꊙ
ꊊ
※ Do not use this column.
[Form 40 ⑴] (Page 20)

ꊭ Calculation of Global Tax on Financial Income
※ Do not use this sheet when your financial income consists of only non-taxable income and
interest․dividend income subject to separate taxation as prescribed as in the Personal Income
Tax Law and the Tax Incentive and Limitation Law.
1. Definitions of the terms
(1) “Financial Income” refers to interest income․dividend income that are globally taxed besides
interest income․dividend income subject to non-taxation or separate taxation under the
Personal Income Tax Law and the Tax Incentive and Limitation Law.
(2) “Financial income free from withholding” means interest income and dividend income not
withheld under Article 127 of the Personal Income Tax Law (financial income received from
abroad).
(3) “Amount exceeding threshold” means the amount remaining after deducting the Comprehensive
taxing threshold amount(40 million won) from the taxable financial income.
2. Choice of the column
(1) When comprehensively taxed aggregated financial income(④+⑧) is more than 40 million won
a year. : Write in column ❷
(2) If aggregated financial income(④+⑧) not withheld under Article 127 of the Personal Income
Tax Law is less than 40 million won a year. : Write in column ❸
* The sum of interest income and dividend income less than 40 million won is separately taxed
under Article 127 of the Personal Income Tax Law. Hence, no need for global income tax
return.
3. ①, ②, ③ : enter the aggregate amount of ⑤ Taxable Interest Income classified by income
classification code in ❺ Details of Interest Income .
4. ⑤Dividend income subject to gross-up : enter the sum of ⑥ Dividend Income for Gross-up of
code 21 from ❻Details of Dividend Income on page 7.
⑥Dividend income not subject to gross-up : enter the sum of ⑤ Dividend Income of code 23
from ❻Details of Dividend Income on page 7.
5. ⑦Dividend besides ⑤, ⑥ : subtract ⑥ from ⑤ (sum of code 21 and 22 respectively) from ❻
Details of Dividend Income on page 7.
6. ⑫Gross-up for dividend received : enter the sum of ⑦ under code 21 of ❻Details of Dividend
Income on page 7.
7. ⑬, 󰊊󰊖, 󰊋󰊕 : enter the total income amount(excluding interest income and dividend) from ⑤ Income
after deficit/Deficit Carried Over in ❾ Details of Global Income, Details of Deficit and Deficit
Carried Over Deduction on page 13. However, dividend as prescribed in §104-11 of the Tax
Incentive and Limitation Law and §17①(6)-3 of the Personal Income Tax Law are added to
other global income. Enter the amount remaining after the deduction, if business loss or deficit
carried over is deducted from interest income.
8. For income deductions under 󰊉 󰊗, 󰊊
󰊗, and 󰊋󰊖, enter the amount derived from 󰊊󰊙 Sum of Exemption
and Deductions on 11 Details of Exemptions and Deductions(page 15).
9. ⑲, 󰊊󰊕, 󰊋󰊔 : sum the financial income withheld respectively at 15%(incurred between Jan. 1,
2001~Dec. 31, 2004) and at 14%(incurred since Jan. 1, 2005)
10. 󰊋
󰊛 under ❹ Tax credit for dividend on page 21 : enter lesser of 󰊔
󰊉 and (󰊋
󰊒-󰊊
󰊛). Taxpayers are
not required to complete an additional application form.
[Form 40 ⑴] (Page 21)
ꊭ Calculation of Global Tax on Financial Income

ꊝ
❶ Computation of Financial Income

①Interest income from non-commercial ⑤Dividend income subject to gross-up
loans
②Interest income not withheld ⑥Dividend income not withheld
③Interest income besides ①, ② ⑦ Dividend income besides ⑤, ⑥
④Total interest income (①+②+③) ⑧Total dividend income (⑤+⑥+⑦)
❷ In case where the amount of column (④+⑧) ❸ In case where the amount of column
(④+⑧) is under the threshold
exceeds the threshold amount(40million won) amount(40million won)
⑨Financial income (④+⑧) 󰊓Financial income not withheld(②+⑦)
󰊋
ꊒGlobal taxation threshold
ꊉ 40,000,000 ꊔ「󰊋
ꊋ 󰊓」× 14/100, 15/100
ꊕGlobal income other than
ꊋ
ꊓAmount exceeding threshold (⑨-󰊉
ꊉ 󰊒) financial income
ꊔGross-up for dividend received
ꊉ ꊖIncome deduction
ꊋ
ꊕGlobal income other than financial
ꊉ
ꊗTax base(󰊋
ꊋ 󰊕-󰊋
󰊖)
income
ꊖGlobal income (󰊉
ꊉ 󰊓+󰊉
󰊔+󰊉
󰊕) ꊘBasic tax rate
ꊋ
ꊗIncome deduction
ꊉ ꊙCalculated tax
ꊋ
ꊋCalculated global income tax amount
ꊚ
ꊘTax base (󰊉
ꊉ 󰊖-󰊉
󰊗) (󰊋
󰊔+󰊋
󰊙)
ꊙBasic tax rate
ꊉ
ꊚTax calculated
ꊉ
ꊛ「󰊉
ꊉ 󰊒」 × 14/100, 15/100
ꊒTax amount comparatively
ꊊ
calculated (󰊉
󰊚+󰊉
󰊛)
ꊊInterest from non-commercial
ꊓ
loans [(①) × 25/100]
ꊔFinancial income from sources other
ꊊ
than non-commercial loans (⑨-①)
ꊕ「󰊊
ꊊ 󰊔」 × 14/100, 15/100
ꊖGlobal income other than financial
ꊊ
income
ꊗIncome deduction
ꊊ
ꊘTax base (󰊊
ꊊ 󰊖-󰊊
󰊗)
ꊙBasic tax rate
ꊊ
ꊚTax calculated
ꊊ
ꊊTax amount comparatively
ꊛ
calculated (󰊊
󰊓+ 󰊊
󰊕+󰊊
󰊚)
ꊋCalculated global income tax
ꊒ
amount (greater of 󰊊󰊒 or 󰊊󰊛))
❹ Tax credit for dividend
󰊛Lesser of 󰊉
󰊋 󰊔 and (󰊋
󰊒-󰊊
󰊛)
[Form 40 (1)] (Page 22)
Instructions for Preparing 18 the Statement of Estimated Income Amount
※ This form, one for each business place, shall be filled out when an estimate return is filed using the Standard
Expense Rate. The column is filled in the order of ①～ ⑨, 󰊊 󰊔 ～󰊋 󰊙, ⑩～ 󰊊 󰊓.
1. ① Income Classification Code : Real Estate Rental Income "30" Business Income "40"
2. ② Serial No. : Set a serial no. by business place regarding the real estate rental income and the
business income. If the number of business place is more than two, write down the real
estate rental income, the sum of the real estate rental income, the business income, and the
sum of the business income by sequence.
3. Under boxes ①～ ⑨, enter ⑦, ⑧, ⑨, by line of business and the total amount of each line in column Total
Amount, if there exists more than one line of business at a business place. If there is only one line of
business, enter the total amount in the right column “Total”
4. In the case of Purchase Expenses(󰊊

󰊔～󰊊
󰊗) and Rental Expenses(󰊊
󰊘～󰊊󰊛) in Details of Calculation of Primary Expense
(1) The received amount in regular evidential document (Tax Invoice, Invoice, Credit Card Sales Slip and Cash
Receipt)is entered in 󰊊
󰊕․󰊊 󰊙
(2) Evidence document other than regular evidential document being received, enter in 󰊊 󰊖․󰊊 󰊚 respectively the
amount mentioned in Details of Primary Expenses.
(3) The amount of such transactions which are not liable to regular evidential document as each purchase
amount is under 30,000 won shall be entered in 󰊊󰊗․󰊊 󰊛.
5. In the case of Wages Expenses(󰊋 󰊒～󰊋 󰊕)

(1) The amount of Receipt for Withholding․Statement Payment (employee contributions) for wages and retirement
payment submitted to the competent district tax office is entered in 󰊋
󰊓.
(2) In case the withholding receipt or payment statement can not be submitted, enter in 󰊋
󰊕.
6. ⑩ : Primary Expense included in Beginning Inventory and ⑫Primary Expense included in Ending Inventory are
filled only in the case they can be calculated separately.
7. ⑪ : The amount of column 󰊋

󰊖 of Details of Calculation of Primary Expenses for the Current Tax Year is entered in .
8. ⑭ : Enter Standard Expense Rate(%) by line of business.
9. ⑱ : Enter Simplified Expense Rate(%) by line of business.
10. ⑲: ⑨ Gross Revenue × (1 - ⑱Simplified Expense Rate)
11. ⑳ : ⑲ × (multiplier designated by the Commissioner of the National Tax Service)
12. 󰊊
󰊓 : Enter the Standard Income Amount of 󰊉
󰊙. A taxpayer may enter the lesser amount of 󰊉
󰊙 or 󰊊
󰊒.
[Form 40 ⑴] (Page 23)

ꊮStatement of Estimated Income Amount
ꊝ
(Only for the taxpayer subject to Standard Expense Rate)
A. Calculation of Income
① Income Classification Code ( ) ( ) Total( )
② Serial No.
③ Place of Business
from
④ T axable Period
to
⑤ Trade Name
⑥ Tax Registration No.
⑦ Kind/Type of Business / / /
⑧ Kind/Type of Business Code
⑨ Gross Revenue
⑩ Included in Beginning
Inventory
⑪ Paid for the Current Tax
Year (＝󰊋󰊖)
⑫ Included in Ending Inventory
⑬ Total Amount
(⑩ ＋ ⑪ － ⑫)
⑭Standard
Expenditure Calculated
by Standard Expense Expense rate(%)
Rate ⑮Amount(⑨×⑭)
ꊘ Total Expense (⑬＋⑮)
ꊉ
󰊙 Standard Income Amount (⑨-ꊉ
󰊉 ꊘ)
(if 󰊉
󰊙 ≤ 0, This is 0)
󰊚 Simplified
󰊉
Income calculated Expense Rate(%)
by Simplified
Expense Rate 󰊛 Amounts
󰊉
{⑨×(1－󰊉 󰊚)}
󰊒 Alternative Income Amounts
󰊊
(󰊉
󰊛× Rate Regulated by National Tax Service)
󰊓 Income Amount (The lesser of 󰊉

󰊊 󰊙 or 󰊒)
󰊊
B. Details of Calculation of Primary Expenses for the Current Tax Year
(Per Each Place of Business)
(B) Received
Classification Total (A) Amount in Regular (C) Amount included (D) Amount not
in Details of Primary included in Details of
(＝B＋C＋D) Evidential Expenditures Primary Expenditures
Document
Purchase 󰊔
󰊊 󰊕
󰊊 󰊖
󰊊 󰊗
󰊊
Expenses
Rental 󰊘
󰊊 󰊙
󰊊 󰊚
󰊊 󰊛
󰊊
Expenses
Wages 󰊒
󰊋 󰊓
󰊋 󰊔
󰊋 󰊕
󰊋
Expenses
Total 󰊖
󰊋 󰊗
󰊋 󰊘
󰊋 󰊙
󰊋
(󰊋
󰊖＝⑪)
※ Attachments : Details of Primary Expenses
※ Do not use this column.

[Form 40 ⑴] (Page 24)
19 Calculation of Global Tax on Financial Income(For Career House Trader)
1. A taxpayer shall fill in this form if he/she is a resident professionally engaged in real estate
transactions under Article 69 of the Personal Income Tax Law, and has gains from house
(including its ancillary land) transactions subject to global income (Applicable to a taxpayer who
has profits from sales of housing or land falling under one of any categories as specified in §104
① 2-3 through 2-7 of the Personal Income Tax Law)
2. 󰊉
󰊓 Sum: Enter gains from the sale or purchase of a house acquired by residents whose
household members possess two or more houses. Gains are calculated by subtracting necessary
expenses and capital gains deduction(2.5million won, *unregistered gains from real estate
transactions are not deducted) from sales prices as provided by Article 163 (1) ～ (5) of the
Presidential Decree of the Personal Income Tax Law.
3. ⑥ Tax Rate: Enter whichever one that is applicable of the tax rates provided by Article 55 and
Article 104 of the Personal Income Tax Law.
4. Calculated Tax Amount : The greater amount of ꊉ

ꊘ or ꊉ
ꊙ
5. Under column ⑧ Sum of Global Income, enter the following information:

(1) ① Total Income: Enter the sum of “⑤ Interest Income”(page 5), ⑧ Dividend
Income(page 7), ⑧ Gross Income Amount(page 9), ⑤ Gross Receipt(page 11), and
dividend income under Article 104-11 of the Tax Incentive and Limitation Law (page 13).
(2) ③ Income Amount: Enter the sum of ⑤ Income After Deficit/Deficit Carried over (page 13).
(3) ② Necessary Expenses: Enter ① Total Income - ③ Income Amount
(4) ④ Income Deduction: This amount is the same as the sum of 󰊊
󰊙 Income Deduction page 15.
6. 󰊉
󰊒 Global Income from Sources Other than Gains from Transaction of 3 houses or more: First
fill out 󰊉
󰊓 Sum through 󰊉
󰊕 Gains from Transaction of Unregistered House and subtract the
amount from ⑧ Total Global Income(calculated as in item 9).
[Form 40 ⑴] (Page 25)
19 Global Income Tax Calculation Form (For Career House Trader)
Resident Registration
Name
No
Address
Comparisons of Calculated Global Income Tax
Classification of Gains from Transaction of House
Global Income from Sources Gains from

ꊉ
ꊒ Transaction House
Global
⑧ Income
Sum of ⑨ ꊗ
ꊉ
Item from ꊉ
ꊔ ꊕ
ꊉ
Global Sum ꊉ
ꊓ ꊖ
ꊉ Gains
Sources Gains Gains
Income (ꊉ
ꊒ＋ꊉꊓ) Sum Land for from
Other than from from
(ꊉ
ꊔ＋ꊉꊕ non-busin Transaction
Gains from Transactio Transacti
+⑭+⑮) ess of
Transaction n of 2 on of 3
purpose Unregistered
of House houses houses
Houses
①Total Income
(House Sales
/Purchase Value)
②Necessary
Expenses
③Income
Amount
④Income
Deduction
0
(Capital Gains
Deduction)
⑤Tax Base
⑥Tax Rate 60% 70%
⑦Calculated ꊘ
ꊉ ꊙ
ꊉ ꊚ
ꊉ ꊛ
ꊉ ꊒ
ꊊ ꊓ
ꊊ ꊔ
ꊊ ꊕ
ꊊ
Tax Amount
※ Reference
1. This form shall be prepared and submitted by a career house trader who has gains from
transactions of houses and etc. according to Article 64 of the Income Tax Act.
2. When a career house trader has financial income subject to global taxation, the trader shall also
submit "Calculation of Global Tax on Financial Income (taxpayers having both financial income
and gains from transaction of house).
[Form 40 ⑴] (Page 26)

Instructions for Preparing 20 Calculation of Global Tax on Financial Income
(Taxpayer having both Financial Income and Gains from Transaction of House)
1. Definitions of the terms
(1) “Financial Income” refers to interest income․dividend income that are globally taxed besides
interest income․dividend income subject to non-taxation or separate taxation under the Personal
Income Tax Law and the Tax Incentive and Limitation Law.
(2) “Financial income free from withholding” means interest income and dividend income not withheld under
Article 127 of the Personal Income Tax Law (financial income received from abroad).
(3) “Amount exceeding threshold” means the amount remaining after deducting the Comprehensive taxing
threshold amount(40 million Won) from the taxable financial income.
2. Choice of the column (󰋏 or 󰋐)
(1) When comprehensively taxed aggregated financial income(④+⑧) is more than 40 million won a year.
: Write in column 󰋏
(2) If aggregated financial income(④+⑧) not withheld under Article 127 of the Personal Income Tax
Law is less than 40 million won a year. : Write in column 󰋐
* The sum of interest income and dividend income less than 40 million won is separately taxed under Article 127
of the Personal Income Tax Law. Hence, no need for global income tax return.
3. ①, ②, ③ : enter the aggregate amount of ⑤ Taxable Interest Income classified by income classification
code in ❺ Details of Interest Income.
4. ⑤ Dividend income subject to gross-up : enter the sum of ⑥ Dividend Income for Gross-up of code 21
from ❻Details of Dividend Income on page 7.
⑥ Dividend income not subject to gross-up : enter the sum of ⑤ Dividend Income of code 23 from
❻Details of Dividend Income on page 7.
5. ⑦ Dividend besides ⑤, ⑥ : subtract ⑥ from ⑤ (sum of code 21 and 22 respectively) from ❻Details of
Dividend Income on page 7.
6. ⑫ Gross-up for dividend received : enter the sum of ⑦ under code 21 of ❻Details of Dividend Income
on page 7.
7. 󰊉
󰊕, 󰊋 󰊒, 󰊌󰊕 Global income other than financial income : write the total income amount excluding interest
income and dividend income from ⑤income after Deficit/Deficit Carried Over of ❾Details of Global
Income, Deficit and Deficit Carried Over Deduction on page 13. However, dividend as prescribed in
§104-11 of the Tax Incentive and Limitation Law and §17①(6)-3 of the Personal Income Tax Law are
added to other global income. Enter the amount remaining after the deduction, if business loss or deficit
carried over is deducted from interest income.
8. When the tax amount of each ꊋ ꊖㆍꊋ ꊚㆍꊌ ꊚㆍꊍ ꊕ is calculated, if dividend income(code 28 of ❻
Details of Dividend Income) of investors is included in other global income amount, the lesser
of ① and ➁ below should be entered.
① (Other global income amount-income deduction)×basic tax rate
➁ Dividend income of investors×14%＋[(other global income amount-dividend income of investors)-income
deduction]×basic tax rate
9. ⑮, 󰊋 󰊓, 󰊌󰊗 : Enter the amount from 󰊊 󰊙 Sum of Exemptions and Deductions of 󰊝 󰊧 Details of Exemptions
and Deductions on page 15
10. 󰊉󰊛, 󰊊󰊛, 󰊌󰊔 : sum the financial income withheld respectively at 15/100 (incurred between Jan.1 2001～Dec.
31, 2004) and at 14/100 (incurred since Jan. 1, 2005)
11. 󰊍󰊙 under 󰋑Tax credit for dividend (see page 27) : enter the smaller of ⑫ or [󰊌 󰊒- (the larger of 󰊋 󰊗 or
󰊛). Taxpayers are not required to fill out additional application forms.]
󰊋
12. 󰊊󰊓, 󰊍 󰊒 Gains from Transaction of House before Capital Gains Deduction : enter the amount from 󰊉 󰊓
Sum(󰊉 󰊔+󰊉󰊕+ꊉ ꊖ+ꊉ ꊗ) of ③ Income Amount on 󰊝 󰊯 Global Income Tax Calculation Form (Fro Career
House Trader) page 25.
[Form 40 ⑴] (Page 27)

20 Calculation of Global Tax on Financial Income
(Taxpayer having both Financial Income and Gains from Transaction of House)
❶ Computation of Financial Income
①Interest income from non-commercial loans ⑤Dividend income subject to gross-up
②Interest income not withheld ⑥Dividend income not withheld
③Interest income besides ①ㆍ② ⑦Dividend income besides ⑤,⑥
④Total interest income (①+②+③) ⑧Total dividend income (⑤+⑥+⑦)
❷ In case where the amount of column (④+⑧) exceeds ❸ In case where the amount of column (④+⑧) is
the threshold amount(40million won) under the threshold amount(40million won)
⑨Financial income (④+⑧) 󰊓Financial income not withheld(②+⑦)
󰊌
ꊒGlobal taxation threshold
ꊉ 40,000,000 󰊔「󰊌
󰊌 󰊓」 x 14/100, 15/100
ꊓAmount exceeding threshold (⑨-󰊉
ꊉ 󰊒) 󰊕Global income other than financial
󰊌
income
ꊔGross-up for dividend received
ꊉ 󰊖Global income(󰊌
󰊌 󰊕)
ꊕGlobal income other than financial
ꊉ 󰊗
󰊌 Income deduction
income
ꊖGlobal income (󰊉
ꊉ 󰊓+󰊉 󰊔+󰊉 󰊕) 󰊘Tax base (󰊌
󰊌 󰊖-󰊌 󰊗)
ꊗIncome deduction
ꊉ 󰊙Basic tax rate
󰊌
ꊘTax base (󰊉
ꊉ 󰊖-󰊉 󰊗) 󰊚Tax calculated
󰊌
ꊙBasic tax rate
ꊉ 󰊛Tax amount comparatively calculated
󰊌
(󰊌
󰊔+󰊌 󰊚)
󰊒Gains from Transaction of House
󰊍
ꊚTax calculated
ꊉ before
Capital Gains Deduction
ꊛ「󰊉
ꊉ 󰊒」 x 14/100, 15/100 󰊓
󰊍 Tax Base not including Gains from
Transaction of House(󰊌 󰊘-󰊍 󰊒)
ꊒTax amount comparatively calculated (󰊉
ꊊ 󰊚+󰊉 󰊛) 󰊔Basic tax rate
󰊍
ꊓGains from Transaction of House before
ꊊ 󰊕Tax calculated
󰊍
Capital Gains Deduction
ꊔTax Base not including Gains from
ꊊ 󰊖Tax on Gains from Transaction of House(ꊉ
󰊍 ꊛ on
Transaction of House(󰊉 󰊘-󰊊 󰊓) page 25)
ꊕBasic tax rate
ꊊ 󰊗Tax amount comparatively calculated
󰊍
(󰊌
󰊔+󰊍 󰊕+󰊍 󰊖)
ꊖTax calculated
ꊊ 󰊘
󰊍 Calculated global income tax amount
(greater of 󰊌󰊛ㆍ󰊍 󰊗)
ꊗTax on Gains from Transaction of House (ꊉ
ꊊ ꊛ on page 25) ❹ Tax credit for dividend
ꊘTax amount comparatively calculated (󰊉
ꊊ 󰊛+󰊊 󰊖+󰊊 󰊗)
󰊙The lesser of 󰊉
󰊍 󰊔 or [(󰊌󰊒-(greater of 󰊋 󰊗 or
ꊙInterest from non-commercial
ꊊ 󰊛)]
󰊋
loans(①)×25/100
ꊚFinancial Income in including Profit from
ꊊ
Non-Business Loan(⑨-①)
ꊛ「󰊊
ꊊ 󰊚」 x 14/100, 15/100
ꊒGlobal income other than financial income(󰊉
ꊋ 󰊕)
󰊓Income deduction
󰊋
󰊔Tax base(󰊋
󰊋 󰊒-󰊋 󰊓)
󰊕Basic tax rate
󰊋
󰊖Tax calculated
󰊋
󰊗Tax amount comparatively calculated (󰊊
󰊋 󰊙+󰊊󰊛+󰊋 󰊖)
󰊘Tax Base not including Gains from
󰊋
Transaction of House(󰊋 󰊔-󰊊 󰊓)
󰊙Basic tax rate
󰊋
󰊚Tax calculated
󰊋
󰊛Tax amount comparatively calculated
󰊋
(󰊊
󰊗+󰊊 󰊙+󰊊 󰊛+󰊋 󰊚)
󰊒Calculated global income tax amount(greater
󰊌
of 󰊊󰊒ㆍ󰊊 󰊘ㆍ󰊋 󰊗ㆍ󰊋 󰊛)
[Form 40 ⑷] (Page 1)
From
This is an important mail with private information, and should be
Note promptly delivered to the taxpayer himself/herself or the taxpayer's
proxy.
Head of ○○ District Tax Office
□□□－□□□
*Helpline of district tax office:
Recipient
To
□□□－□□□
<For taxpayers with single income, who are subject to Simplified Expense Rate>
Global Income Tax Return
1. Please note that penalties are imposed if a taxpayer fails to file a return even if taxes were paid. Please
make sure that fill out this form and submit it to the district tax office by mail or e-filing service.
2. For the convenience of corporate taxpayers, the NTS provides partial or whole documents and
basic guide material regarding global income tax return based on the information the Service
has on the taxpayers. Rewrite the pre-written wrong data correctly according to your own
data.
3. Other income such as wages and salaries, etc. besides amount of income written in this form shall be reported
comprehensively using the following Form 40 (1)
4. Please refer to the explanation on each form and the instructions on page 4 before preparing
the return documents.
Guide for global income tax return

(For the year of ) Final Return Base and Computation of Resident1

Ref. No－ Residency /Non-resident2
Tax to be paid For Global Income Tax and Inhabitant Tax
Nationality Citizen1 /Foreigner9
(Single Income - Simplified Expense Rate)
State of State
Residence code
①Name ②Resident Reg. No －
③Company Name ④Tax Reg. No. －－
⑤Address ⑥E-mail
⑦Home Phone No ⑧Business Phone No ⑨Mobile No
⑩Type of ꋅEstimate－
ꊼ ⑪Classification by 2. Simplified ⑫Type of ꋃ Real Estate Rental Income
ꊼ
Return Simplified Rate bookkeeping Bookkeeping Income ꋃ Business Income
ꊽ
Basic Rate ⑮Return 10.Regular 20.Amended
⑬Business ⑭Simplified Expense Classificatio declaration 40. Return
Type code Rate(%) Excess Rate n after due date
❷ Bank Account for Tax Refund ꊘName of Bank/post office

ꊉ ꊙAccount No
ꊉ
❸ Computation of Global Income Tax

Classification Amount
ꊋWrite down your Gross Revenue
ꊓ
ꊔNecessary Expense based on Simplified Expense Rate : ꊋ
ꊋ ꊓGross Revenue×⑭Simplified Expense Rate(%)
ꊕAmount of Global Income : ꊋ
ꊋ ꊓ－ꊋ ꊔ
ꊖ Total Income Allowances : Total of Detail of Income allowances (ꊌ
ꊋ ꊔ～ꊌ ꊙ)
List names of personal deductions Personal Deduction
Relati Name Nationalit Resident Registration Basic Classification No. of Amount
onship y No deduction persons
ꊗB a s i c
ꊋ D e d u c t i o n
ꊘPerson who is 70 or older
ꊋ
Add ꊋ ꊙPerson who is 65 or older
itionꊋ
al ꊚThe handicapped
list Ded ꊋ ꊛFemale worker
ucti ꊌ
ꊒLineal descendant less than 6
of on years of age
inco ꊓNew born/Newly adopted
ꊌ
me ꊔAdditional deduction for
ꊌ
dedu households with multiple children
ction ꊕTotal personal deduction(ꊋ
ꊌ ꊗ～ꊌꊔ)
ꊖEnter the deduction amount of donation expenses referring the instruction of donation deduction(page 4)
ꊌ
ꊗStandard Deduction : 600,000won
ꊌ
ꊘPersonal pension savings deduction : Fill out the blank with the less amount between the 40%
ꊌ
of personal pension savings paid in the previous year and 720,000won
ꊙPension savings deduction: Fill out the blank with the less amount between pension savings
ꊌ
paid in the previous year and 3,000,000won
ꊚPension insurance premium deduction :
ꊌ write down the amount of the national pension
insurance premium paid up last year.
ꊛTax Base : ꊋ
ꊌ ꊕ－ꊋ ꊖ (If the amount is less than 0, this is 0 )
ꊒTax Rate: Enter the tax rate by referring to the instruction(page 4)
ꊍ
ꊓTax Calculated : ꊌ
ꊍ ꊛ×ꊍ ꊒ－Progressive Deduction by referring to the instruction(page 4)
ꊔTax Credit : Enter the total of tax credits below(ꊍ
ꊍ ꊕ～ꊍ ꊙ)
ꊕTax credit for taxpayer association : Enter the amount of Tax credit for taxpayer association
ꊍ
listed in line 33 of Receipt of Taxpayer Association.
ꊖTax credit for e-filing : If taxpayer directly files a e-filing return through a internet, 20,000
ꊍ
List won is available
of
tax ꊍꊗTax credit on political fund donations: The entire amount for donations of 100,000 won or less
credi made to political parties (by support groups, the National Election Commission, etc) during the
t current year, and 100,000 won for donations exceeding 100,000 won
ꊘTax credit carryovers(including e-filed tax credits which was not deducted from the previous year)
ꊍ
ꊙ
ꊍ
ꊚSpecial Tax Deduction for Small&Middle Size Business
ꊍ
ꊛTax Determined : ꊍ
ꊍ ꊓ－ꊍ ꊔ－ꊍ ꊚ(if the amount is less than 0, this is 0)
Classification Amount
ꊒPenalty Taxes : Enter the total of detail of penalty taxes(ꊎ
ꊎ ꊓ～ꊎ ꊛ)
Classification Calculation Base Target Rate Amount
ꊓFailure
ꊎ Intentional
to file
returns Unintentional
ꊔUnder-rep
ꊎ Under reported 40/100
Intentional
orting of Gross Revenue 14/10,000
income Unintentional Under reported 10/100
ꊕExcessive Intentional
ꊎ Excessive Refund 40/100
D e t refund claim Unintentional Excessive Refund 10/100
ail Sum of Days Unpaid ( )
ꊖUnfaithful
ꊎ
3/10,000
payment(refund) Amounts Unpaid
of
ꊗUnfaith Withho Failure to submit Non-submission Amt.
ꊎ 2/100
pen ful lding
report receipts Late submission Amt. late submitted 1/100
alty
ꊘUnfaithful Failure to register
ꊎ Gross Revenue 0.5/100
t a x registration of /Fraudulent register
es co-invested Fraudulent registration Gross Revenue 0.1/100
business place of profit allocation ratio
ꊙFailure to maintain adequate
ꊎ Calculated Tax
20/100
books and records Amount
ꊚ Failure to Non-issuance Amount
ꊎ 5/100
issue receipts
of credit card
sales Number of Non-issuance 5,000W
ꊛ
ꊎ Stores not issuing Gross Revenue 0.5/100
Non-issuance Non-issuance Amount 5/100
of cash receipts Number of Non-issuance 5,000W
ꊒTotal Tax Determined : ꊍ
ꊏ ꊛ＋ꊎ
ꊒ
Tax ꊏInterim Payment
ꊓ
Prepaid ꊏ
ꊔTax withheld and withholding agent tax reg. No(Tax Reg. No )
ꊕEarned Income Tax Credit
ꊏ
ꊖTax Due or Tax Refundable : ꊏ
ꊏ ꊒ－ꊏ
ꊓ－ꊏ
ꊔ-ꊏ
ꊕ
❹ Computation of Inhabitant Tax
ꊏTax Base : ꊏ
ꊗ ꊒTotal Tax Determined
ꊘTax Rate
ꊏ 10%
ꊙTax Calculated : ꊏ
ꊏ ꊗ(=ꊏꊒ)×10%
ꊚTax Withheld : ꊏ
ꊏ ꊔ×10%
󰊛Tax Due or Tax Refundable : ꊏ
󰊏 ꊙ - ꊏ
ꊚ
I declare that I have examined this form and to the best of my knowledge and belief, it is
true, complete, and is accordance with Article 70 of the Income Tax Law, Article 177-4 of the
Local Tax Law, and Article 45-3 of the Framework Act on National Taxes.
200 . . . Income earner name signature
※ Attachments
1. Handicap verification records: Only when applicable and with no previous submission
2. [Form 45] Details of Donations and donation payment receipts: Only when applicable.
3. Residence Registration Record or Family Register Record: Submission unnecessary if no changes
have occurred since the previous submission.
4.
※ This return should be sent to the tax office by May 31..
Instructions
1. ⑭Simplified Expense Rate is applied to the self-employed whose aggregate income of the previous year is
below the amount listed as below by line of business and to new starters of the current year.(Your
Simplified Expense Rate is computerized and specified on the tax return form)
(1) Agriculture, Hunting & Forestry, Fishing, Minning, Wholesale and Retail Trade, and other types of
business which do not fall under following categories : 60 million won
(2) Manufacturing, Hotels and Restaurants, Electronic․Gas and Water-supply, Construction, Transport, Storage
& Communications, Finance & Insurance : 36 million won
(3) Real Estate, Service(Personal Service) : 24 million won
※ Starting from Jan. 1,2008, simplified expense rate shall not apply to self-employed individuals with
professional occupations(e.g.,doctor, lawyer, tax account, etc.) as specified in §143 ⑦ of the Enforcement
Decree of Income Tax Law
2. ⑯ Name of Bank/post office & ⑰ Account No.: fill out if the taxpayer has tax due or tax refundable in ꊏ ꊔTax Due
or Tax Refundable.
3. Detail of Personal Deduction : Enter personal information on the taxpayer him/herself, spouse and dependents subject
to personal deduction.
(1). Relationship code : Please state relationship to employee
Yourself=0 Linear ascendant of yourself=1, Linear ascendant of spouse=2, spouse=3, Linear descendent=4, Brother and
Sister=5, others=6 spouse of Linear descendent=7 (and spouse for 4, 5, 6, 7)
(2) Nationality code : Citizen “1”, Foreigner “2”
4. ꊋ
ꊗBasic Deduction : 1,000,000 won per capita is deductible(number of persons × 1,000,000 won) for yourself and family
(1) a spouse whose annual income is not more than one million won in the aggregate
(2) a dependent falling under any of the following items and living together with the resident (including his spouse) and whose annual
income is not more than 1 million won in the aggregate. ※ The handicapped among dependents qualify for deduction regardless of
age.
(1) A lineal ascendant aged sixty or older(fifty-five for female)
(2) A lineal descendant of the resident or adopted person living together with resident aged twenty or less
(3) A taxpayer whose children and their spouses are disabled
(4) A sibling aged under twenty or over sixty
(5) A recipient under Article 2(2) of the 「National Basic Living Security Act」
5. Additional Deduction : If a taxpayer subject to the basic deduction meets any of the following conditions, he/she can receive additional
deduction
ꊘ70 years or older: 1.5 million won per dependent
ꊋ ꊙ65 years or older: 1 million won per dependent
ꊋ
ꊚA handicapped person: 2 million won per dependent
ꊋ
ꊛA female worker having no spouse and a householder having dependents, or a woman having a spouse: 500.000 won per dependent
ꊋ
ꊒA child under six years old or an adoptee : 1 million won
ꊌ
ꊓNew born or newly adopted : 2 million won
ꊌ
6. ꊌ
ꊔAdditional deduction for households with multiple children : If the number of children eligible for basic deduction is 2,
enter 500,000 won. If the number of eligible children is 3 or more, enter the sum of 500,000 won for the first and second
child combined and 1 million per child from the 3rd child.
7. ꊌꊖDeduction for donations: Fill out the form 45 of the Statement of Donation first and deduct certain amount from donations
within the deduction limit below by types of donation codes.
➀Donations regarding code 10, 20, 21 of the Statement of Donations: ꊋ ꊕGlobal income amount
➁Donations regarding code 30, 31: (ꊋ ꊕGlobal income amount-➀Deducted amount for donations)× 50%
➂Donations regarding code 42: (ꊋ ꊕGlobal income amount-➀～➁ Deducted amount for donations)× 30%
④Donations regarding code 40, 41: (ꊋ ꊕGlobal income amount-➀～➂Deducted amount for donations)×10%+[the lesser
between (ꊋ ꊕGlobal income amount-➀~➂Deducted amount for donations)×5% and donations regarding code 40]
8. ꊍꊒ Tax Rate is applied to the tax rate in the table below according to your tax base of ꊌ ꊛ.
ꊒ Tax calculated : tax base(ꊌ
ꊍ ꊛ)×tax rate(ꊍ ꊒ) - progressive deductions
(Unit : 1,000 won)
Tax Progressive Tax Progressive
Tax Base rate deduction Tax Base rate deduction
Over 46,000~Not more than
Not more than 12,000 8% 0 88,000 26% 5,220
Over 12,000~Not more than 17% 1,080 Over 88,000 35% 13,140
46,000
* if tax base is 13,150,000 won : 13,150,000 × 17% - 1,080,000 =1,155,500
9. ꊓꊎ,ꊎꊔ Penalty for Failure to File Returns or Intentional Under-report : Enter the larger of the amounts calculated applying penalty
rate on the Un(Under) reported or revenue(in case of unreported).
10. ꊎ
ꊙPenalty for No-Bookkeeping : A taxpayer subject to Simple Bookkeeping, with gross revenue of over 48 million won during the
preceding year, fails to keep book and file a estimate return by Standard(Simplified) Expense Rate, enter the amount equivalent to
20/100 of the calculated tax amount.
11. If a taxpayer fulfills obligations such as filing returns․correcting under-reporting․registering co-invested
business place and profit allocation ratio properly within 1 month after the due date, reduce the concerned
penalty taxes by 50% and enter the figure.
12. ꊏ
ꊔTax withheld and withholding agent tax reg. No.: Enter the total income tax withheld by withholding agents when a
taxpayer (insurance agent, salesperson and etc.) was paid for the personal service he/she provided. Enter the reg. No.
of a withholding agent whose payment sum was the largest.
13. ꊏ
ꊕEarned Income Tax Credit: Enter the figures of "❺ Amount requested as earned income tax credit" from
the earned income tax credit application form (for tax reassessment․revision, enter the figures of "❼ refund
money of earned income tax credit").
Appe n d ix
Appendix A. Income Tax Calculation Chart for

Resident ESL Teachers
Monthly withholding tax Independent contractor

Employee (Freelancer)
When At the time of payment At the time of payment
Withholding agent Employer Payer
Tax Rate Simplified tax table 3.3%
Ⓐ Prepaid Tax sum of monthly withholding taxes
Final Return Independent contractor

Employee (Freelancer)
Return method year-end tax settlement global income tax return
When February of the following year May of the following year
Filer employer yourself
Ⓑ Total tax liabilities Tax base × tax rate Tax base × tax rate
Ⓐ Prepaid Tax > Ⓑ Total tax Ⓐ Prepaid Tax < Ⓑ Total tax
liabilities liabilities
Tax Refund Additional Payment

138 Appendix
Appendix B. Tax Offices in Major Cities
NTS : National Tax Service

RTO : Regional Tax Office
DTO : District Tax Office
Name of Office Location TEL Jurisdiction
Int'l Tax Resource Man- 104 Susong-dong 397-1440

Nationwide
agement Division of NTS Jongno-gu, Seoul 397-1442~3
NTS Customer Satisfaction 824 Yeuksam-dong

1588-0060 Nationwide
Center Gangnam-gu, Seoul
104 Susong-dong 24 DTOs in

Seoul RTO 2076-5711
Jongno-gu, Seoul Seoul area
Banpo DTO 874-4 Bangbae 4-dong 590-4200 Taxable

Seocho-gu, Seoul
Business
Dobong DTO 327-5 Mia 8-dong 944-0200
Gangbuk-gu, Seoul in given
235-5 Cheongryangri Dong Area

Dongdaemun DTO 958-0200
1-dong
Dongdaemun-gu, Seoul
Dongjak DTO 476 Singil 6-dong 840-9200
Yeongdeungpo-gu, Seoul
Gangdong DTO 388-6 Pungnap 2-dong, 2224-0200

Songpa-gu, Seoul
Gangnam DTO 45 Cheongdam-dong 519-4200

Gangnam-gu, Seoul
Gangseo DTO 24 Yangpyeongdong 4-ga 2630-4200

Geumcheon DTO 953-9 Doksanbon-dong 850-4200

Geumcheon-gu, Seoul
Guro DTO 23-1 Mullaedong 1-ga 2630-7200

Appendix B. Tax Offices in Major Cities(Continued)
Jongno DTO 58-8 Nagwon-dong 760-9200

Jongno-gu, Seoul Taxable
Jungbu DTO 12-3 Namhak-dong 2260-9200 Business

Jung-gu, Seoul
in given
Mapo DTO 43 Sinsu-dong 705-7200 Dong Area
Mapo-gu, Seoul
Namdaemun DTO 1 Jeodong 1-ga 2260-0200

Jung-gu, Seoul
15 Changdong
Nowon DTO 901-0200
Dobong-gu, Seoul
Samseong DTO 824 Yeuksam-dong 3011-7200

Gangnam-gu, Seoul
Seocho DTO 824 Yeuksam-dong 3011-6200

Gangnam-gu, Seoul
Seodaemun DTO 251 Hongje 3-dong 2287-4200

Seodaemun-gu, Seoul
Seongbuk DTO 3-2 Samseondong 3-ga 760-8200

Seongbuk-gu, Seoul
Seongdong DTO 67-6 Songjeong-dong 460-4200

Seongdong-gu, Seoul
Songpa DTO 388-6 Pungnap 2-dong, 2224-9200

Songpa-gu, Seoul
Yangcheon DTO 319-12 Sinjeong 6-dong, 2650-9200

Yangcheon-gu, Seoul
Yeoksam DTO 824 Yeuksam-dong 3011-8200

Gangnam-gu, Seoul
Yeongdeungpo DTO 552-1 3ga Dongsandong 2630-9200

Yongsan DTO 65-342, Hangangno 3-ga 748-8200

Yongsan-gu, Seoul
140 Appendix
Appendix B. Tax Offices in Major Cities(Continued)
26 DTOs in
216-2 Pajang dong, (031) Gyeonggi,
Jungbu RTO
Jangan-du, Suwon 888-4200 Incheon &
Gangwon Area
14 DTOs in
282-1 Beop-dong (042) Daejeon &
Daejeon RTO
Daedeok-gu, Taejeon 620-3200 Chungcheong
Area
14 DTOs in
627-7 Ssangchon-dong (062)
Gwangju RTO Gwangju &
Seo-gu, Gwangju 370-5200
Jeolla Area
13 DTOs in
402-1 Chimsan 3-dong (053) Daegu &
Daegu RTO
Buk-gu, Daegu 350-1200 Gyeongbuk
Area
16 DTOs in
243-13 Yeonsan 9-dong (051) Busan, Ulsan,
Busan RTO
Yeonje-gu, Busan 750-7201 Gyeongnam &
Jeju Area
Appendix C. Tax payers Association
Name Tel Location
United States 397-4348 82 Sejongno, Jongno-gu, Seoul

Embassy
Embassy of 2170-5267 18-11 Junghak-dong, Jongno-gu, Seoul
Japan
Abroad
Employment 757-9582 163-3 Euljiro 2-ga, Jung-gu, Seoul
Global 3276-0531 5th Fl, 92 Galwol-dong, Yongsan-gu, Seoul
Ilsin 567-9100 4th Fl. KM Bldg. 130-10, Samsung-dong,

Gangnam-gu, Seoul
1132, Doosanweeve Bldg. 58 Susong-dong,
Korea 730-7190 Jongno-gu, Seoul
Namsan 3438-2488 71-2 Nonhyeon-dong, Gangnam-gu, Seoul
Seoul 784-9265 25-15 Yeoeuido-dong, Yeongdeungpo-gu, Seoul

Regional
Kangnam 2112-0903 31-57 Seongbuk-dong, Seongbuk-gu, Seoul
Seyang 3703-8745 12th Fl. Jeokseon Hyundai Bldg. 80

Jeokseon-dong, Jongno-gu, Seoul
Amkor 460-5480 280-8 Seongsu 2-ga, Seongdong-gu, Seoul
8th Fl, Dongyeong Munhwa Center, 772

KwangGyo 3453-8004 Yeoksam-dong, Gangnam-gu, Seoul
Korean (051) 462-3633 84-14 Jungangdong 4-ga, Jung-gu, Busan
Mariners
Youngnam (051) 636-3893 541Ho Jayu Market Bldg., 830-24,

Beomil-dong, Dong-gu, Busan
DongJin (051) 336-5518 1211-1 Choryang-dong, Dong-gu, Busan
Geoje (055) 688-2141 555-1, Okpo, Geoje
Ulsan (052) 227-3082 1st Fl, Korea Shipping Bldg, 1602-4

Samsan-dong, Nam-gu, Ulsan
142 Appendix
Appendix D. Treaties with foreign countries
We, the government of republic of korea, have entered into tax treaties with many
countries for the avoidance of double taxation and the prevention of fiscal evasion on
income and the encouragement of international trade and investment. You can find the
tax treaties between korea and 70 countries.
◦ Enforcement (74 Countries)
Date of Entry Date of Date of

Countries into Force Countries Entry into Countries Entry into
Force Force
Japan 70.10.29 Thailand 77.10.12 Germany 78.5.4
United Kingdom 78.5.13 Denmark 79.1.7 Belgium 79.9.19
U.S.A 79.10.20 Canada 80.12.19 French 81.2.1
Singapore 81.2.11 Netherlands 81.4.17 Switzerland 81.4.22
Finland 81.12.23 Sweden 82.9.9 Malaysia 83.1.2
New Zealand 83.4.22 Australia 84.1.1 Norway 84.3.1
Bangladesh 84.8.22 Turkey 84.3.27 Sri Lanka 86.6.20
India 86.8.31 Philippines 86.11.9 Luxemburg 86.12.26
Pakistan 87.10.20 Austria 97.12.1 Indonesia 89.5.3
Tunisia 89.11.25 Hungary 90.4.1 Brazil 91.11.21
Ireland 91.12.27 Poland 92.2.21 Italy 92.7.14
Mongolia 93.6.6 Egypt 94.2.6 Vietnam 94.9.9
China 94.9.28 Rumania 94.10.17 Spain 94.11.21
Mexico 95.2.11 Fiji 95.2.17 Czech 95.3.3
Bulgaria 95.6.22 Russia 95.8.24 South Africa 96.1.7
Israel 97.12.13 Portugal 97.12.21 Malta 98.3.21
Papua New Guinea 98.3.21 Greece 98.7.10 Uzbekistan 98.12.25
Kazakhstan 99.4.9 Kuwait 00.6.13 Moroco 00.7.1
Ukraine 99.9.29 Nepal 03.5.29 Belarus 03.6.17
Slovakia 03.7.8 Chile 03.7.25 Myanmar 03.8.4
U. A. E 05.3.2 Jordan 05.3.28 Laos 06.2.9
Oman 06.2.13 Slovenia 06.3.2 Algeria 06.8.31
Croatia 06.9.15 Albania 07.1.13 Venezuela 07.1.15
Lithuania 07.7.14 Iceland 08.10.23 Azerbaijan 08.11.25
Saudi Arabia 08.12.1 Qatar 09.4.15
National Tax Service provides following foreign taxpayer services.
Foreign Taxpayer Help-line (English) ☎ 02-397-1440

Q&A, Foreign Taxpayer Advocate (English) www.nts.go.kr/eng
English Web Page of NTS www.nts.go.kr/eng
National Tax Consultation Center ☎ 1588-0060
NTS Hometax Service www.hometax.go.kr
Income Tax and Benefit Guide for Foreigners 2009
◦ Issue Date : May, 2009

◦ Publisher : International Tax Resource Management Division,
◦ Edited by : Director Suh, Jin-oog
Deputy Director Cho, Se-hee
Tax Inspector Kim, Chang-gon
Tax Inspector Kwon, Sullak
Editor Song, Su-mi
◦ Printing : Doohab Printing Co.
This book is published to present a brief overview of the individual

income taxation of Korea. Its contents are also provided on the
NTS website. If any discrepancies are found between its contents
and the current Korean Tax Code, the latter shall prevail. If you
have any questions regarding the foregoing or if we can be of any
assistance to your tax matters, please do not hesitate to contact us
at 82-02-397-1440(1456~1458) or 720-4105(Facsimile). This book
may not be lent, resold, hired out or otherwise disposed of by way
of trade in any form of binding or cover other than that in which
it is published, without the prior consent of the publisher.
정 부 간 행 물 등 록 번 호
“Paying taxes, it’
s our noble duty 11-1210000-000044-10
and the most beautiful act of giving back”
Individual Income Tax and Benefit Guide for Foreigners 2009

(For use in preparing 2008 returns )
Individual Income Tax and

Benefit Guide for Foreigners 2009

Individual Income Tax and Benefit Guide For Foreigners 2009

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Individual Income Tax and Benefit Guide For Foreigners 2009

Загружено:

Авторское право:

Доступные форматы

정 부 간 행 물 등 록 번 호

“Paying taxes, it’

and the most beautiful act of giving back”

Individual Income Tax and Benefit Guide for Foreigners 2009

Individual Income Tax and

National Tax Service

Yun Jun Park

Figure 1. Global Individual Income Taxation of Korea

Interest Dividend Real Estate Business Wage Pension Other

Figure 2. Individual Income Taxation on the Income of Non-resident

Yes Tax-free Income?

Domestic with a few exceptions

with a few exceptions

Part Ⅱ Outline of Individual Income Tax System

D. Special Tax Treatment for Tax Credits ········································ 70

Part Ⅲ Individual Income Tax System for Non-resident

What are major changes for 2009 ?

1. Deduction limit extended for individual's designated

(Article 34(1)․ Article 52(6) of the Income Tax Act)

◦ To promote the culture of contribution by individuals

◦ Effective for contribution made on and after Jan. 1, 2008

2. Profit or loss from valuation of monetary foreign

(Article 97 of the Enforcement Decree of the Income Tax Act)

◦ Profit or loss from valuation of monetary foreign currency assets

◦ Monetary foreign currency assets & ◦ Profit or loss from monetary

- Valuation method : acknowledgment

․ Monetary foreign currency assets

3. Additional deduction extended for newly born or

(Article 51(1) of the Income Tax Act)

◦ The new law aimed at reducing taxpayers' liabilities in the

◦ The law also intends to improve the public's awareness toward

<New> ◦ Under the new law

- A taxpayer will receive additional

◦ Effective for birth․adoption reported on and after Jan. 1, 2008

4. A Handicapped person's handicapped spouse

(Article 50(1) of the Income Tax Act)

◦ To expand tax support to the households of the handicapped

<New> ◦ Under the revised law,

- The handicapped spouse of a

◦ Effective for income incurred on and after Jan. 1, 2008

5. Global income tax base adjusted

(Article 55 of the Income Tax Act)

◦ The benchmark amount of the tax base is adjusted upward given

tax base rate tax base rate

◦ Effective for income incurred on and after Jan. 1, 2008

6. Tax support expanded for bookkeeping taxpayers

(Article 56-2(1) of the Income Tax Act)

◦ Tax credit scope for bookkeeping is revised upward to improve

◦ Tax credit for bookkeeping ◦ Tax credit for bookkeeping

․ Double bookkeeping: 15% of the ․ Double bookkeeping : 20% of the

◦ Effective for income incurred on and after Jan. 1, 2008

7. Non-resident entertainers and etc. exempt from

(Article 73(3) of the Income Tax Act)

◦ When the payers withhold taxes at the money they paid to

※ Non-taxable foreign entertainment & sports

◦ Effective for income tax paid according to the withholding regime

8. Due date extended for the payment of income

(Article 77 of the Income Tax Act)

◦ To make it easier for taxpayers to pay taxes by extending the

◦ Installment payment regime ◦ Extension of installment due

- Due date - Due date extended

9. Penalty tax regime improved regarding business