In this blog post, we will explore the important aspects of bookkeeping and the submission of a statement of payment in relation to income tax in Korea.
Keeping of and Entry in Books (Article 160, Income Tax Act)
As per the Income Tax Act in Korea, it is mandatory for all business operators to maintain supporting documents to calculate the amount of taxable income. These supporting documents should include detailed records of transactions related to the business. The purpose is to objectively identify all business-related transactions.
Submission of Statement of Payment (Article 164, Income Tax Act)
A statement of payment must be submitted to the tax authorities for certain types of income. The following incomes require submission:
- Interest income
- Dividend income
- Business income subject to tax withholding
- Wage & salary income or retirement income
- Pension income
- Other income
- Domestic source income paid to non-residents
Due Date for Submission of Statement of Payment
The due date for submitting the statement of payment varies depending on the type of income:
- For most types of income, the due date is the last day of February of the year following the year in which the payment was made.
- For business income, wage and salary income, or retirement income subject to tax withholding, the due date is March 10 of the year following the year in which the payment was made.
- In the case of wage and salary income of daily workers, the due date is the last day of the month after the last month of the quarter in which the payment date falls.
- If a withholding agent suspends or closes down their business, the due date is the last day of the second month from the month in which the date of suspension or closure occurs.
Conclusion
In conclusion, understanding the requirements for bookkeeping and the submission of the statement of payment is crucial for business operators in Korea to comply with income tax regulations.
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