Whether you're heading to Seoul for a new job, teaching English in a smaller city, or diving into the rich culture and fast-paced lifestyle of one of Asia’s most dynamic countries, South Korea is an exciting and rewarding destination for expats.
In this guide, we’ll walk you through everything you need to know about relocating to Korea from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Korea follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
if you spend more than 182 days in Korea during the tax year.
if you have access to a home in Korea on more than 182 days during the tax year.
if you are Korean domiciled.
Providing you are considered a foreign resident, foreign incomes and gains will be exempt from taxation in Korea providing that the foreign incomes and gains are not remitted to Korea. Korea can be a very tax efficient place to live for expats and nomads and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
Exempt from Korean taxation.
Applied for five years.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Korea, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Korea has 95 double taxation agreements signed.
