Under the Restriction of Special Taxation Act (Article 126-2), certain individuals in Korea can benefit from income deductions based on the amount spent using credit cards, debit cards, and cash receipts. The deductions apply to residents with wage and salary income, their spouses with an annual income of not more than 1 million won, and their lineal descendants and ascendants with an annual inc..

Global income deductions are an essential aspect of income tax calculations in Korea. In this blog post, we will explore the various types of deductions available for residents with global income, which help reduce their taxable income. These deductions play a crucial role in determining the tax base for global income. Let's delve into the details! Global Income Deduction Overview The tax base f..

In this blog post, we will delve into the special cases concerning the exclusion of expenses related to business-use vehicles from necessary expenses according to Article 33-2 of the Income Tax Act in Korea. We will also explore the scope of business-use vehicles and the calculation of expenses related to them. Additionally, we'll discuss the depreciation of business-use vehicles and how loss fr..

Depreciation costs play a significant role in calculating the necessary expenses for businesses in Korea. Understanding the methods of calculating depreciation and the factors involved is crucial for accurate reporting and complying with tax laws. Methods of Calculating Depreciation Depreciation of fixed assets is determined using the following methods: 1. Original Cost of Fixed Assets For purch..

In this blog post, we will delve into the concept of necessary entertainment expenses for income tax purposes in Korea. Understanding what qualifies as necessary expenses can help businesses optimize their tax deductions while ensuring compliance with the relevant regulations. Necessary Entertainment Expenses According to Article 35 of the Income Tax Act, entertainment expenses related to busine..

When it comes to income tax in Korea, understanding donations and their inclusion in necessary expenses is essential. This article will break down the rules and limits for different types of donations, so you can have a clear understanding of how they affect your taxable income. Designated Donations and Necessary Expenses Under Article 34(2) of the Income Tax Act, designated donations are subjec..

In this blog post, we will delve into the concept of necessary expenses for business income in Korea. Understanding these expenses is crucial for businesses to accurately compute their taxable income. Let's explore the scope and categories of necessary expenses for business income. Scope of Necessary Expense Necessary expenses for business income encompass the total amount of expenditures incurr..

For revenue from lease deposits and similar amounts, a portion known as "deemed rent" is included in the gross revenue. However, there are exceptions for housing leases with certain conditions. If a taxpayer owns three or more houses with the sum of their deposits exceeding 300 million won, the deemed rental income is included in the gross revenue. Deemed rental income where income is calculated..

We will delve into the details of income tax in Korea, focusing on the calculation of the tax base (taxable income) and different types of income. Understanding these concepts is crucial for individuals and businesses operating in Korea. So, let's get started! Calculation of Tax Base (Taxable Income) Taxable income, also known as the tax base, is an essential factor in determining the amount of ..

To understand the rules for calculating income tax in Korea, we need to focus on a few key aspects. The provisions related to the computation of tax base apply to the real income, profit, property, act, or transaction, irrespective of its title or form (Article 14 of the Framework Act on National Taxes). Substance Over Form The Korean tax system emphasizes substance over form. This means that th..

Introduction to Income Tax in Korea Income tax is a crucial aspect of the Korean tax system, and understanding its intricacies is essential for individuals and businesses operating in Korea. This blog post aims to provide a comprehensive overview of income tax regulations in Korea, covering taxable income, non-taxable income, and tax-exempt income. Taxable Income 1. Types of income subject to gl..

Non-Taxable Income In the Korean tax system, non-taxable income refers to the income for which the tax authority waives its taxing rights. This means that such income is excluded from taxation, and taxpayers do not need to apply for non-taxation status. Various types of income fall under this category, providing certain exemptions for individuals and businesses. Non-Taxable Income Examples 1. In..

Non-global income We will explore the concept of "retirement income" in the context of income tax in Korea. Retirement income refers to a lump-sum payment made by an employer to an employee upon their retirement after a considerable period of service. We'll discuss what is included in retirement income and how it is treated for tax purposes. What is Included in Retirement Income? Retirement inco..

[Income Tax in Korea] Housing rental income we will discuss the key aspects of reporting housing rental income and the associated income tax regulations in Korea. Persons Subject to Reporting Housing Rental Income Individuals who own residential properties meeting any of the following criteria are required to report their housing rental income: Persons owning housing over 900 million won in stan..

Religious person’s income Definition of Religious Person's Income Religious person's income, as defined in Article 21 (1) 26 of the Income Tax Act, refers to the income received by a religion-related worker, also known as a "religious worker," from the religious organization he/she belongs to. This income is related to the execution of a religious rite or any other activity performed as part of ..