In Korea, taxpayers are required to file and pay income tax on their global income by the designated due date for filing income tax returns. Additionally, residents with global income must make interim prepayments of income tax to the relevant authorities. In this blog post, we will explore the key aspects of income tax filing, interim prepayment, and the final return process for global income in Korea.
Interim Prepayment of Global Income Tax
Residents with global income are subject to interim prepayment of income tax, and this payment should be made by November 30th each year. The interim prepayment amount is calculated as 1/2 of the tax paid or payable on global income in the previous taxable year.
"The amount of tax paid or payable as income tax on global income in the preceding taxable year" includes the sum of the interim tax prepayment amount in the preceding taxable year, any tax voluntarily paid when filing a final return, and any applicable penalty tax.
Final Return of Global Income Tax
For residents with global income, a final return of tax base must be filed with the competent district tax office from May 1st to May 31st of the following year. If a resident who is required to file a final return leaves Korea and moves abroad, they must submit a return of tax base for the taxable period that includes the day before their departure.
Required Documents for Filing Global Income Tax
When filing global income tax, taxpayers need to submit the following documents along with their tax return:
- Documents certifying eligibility for basic deduction and other deductions.
- Documents necessary for the calculation of gross revenue and necessary expenses.
- For businesses based on bookkeeping records, documents like the balance sheet, income statement, compound trial balance, and statement of adjustment should be provided.
- Statement of income by simplified bookkeeping for operators of a business that does not meet the requirements of Article 208 (5) of the Enforcement Decree of the Income Tax Act.
- Documents related to non-taxation, tax abatement, or exemption.
Conclusion
Filing and paying global income tax in Korea is an essential obligation for taxpayers with global income. By understanding the process of interim prepayment and the final return of tax base, individuals can fulfill their tax responsibilities and contribute to the country's financial system.
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