In this blog post, we will explore penalty taxes and late payment fees related to income tax in Korea. Understanding these penalties is crucial for residents to avoid unnecessary financial burdens. Penalty Tax on Non-filing or Incorrect Filing If a resident in Korea, who is obligated to file an income tax return, fails to do so within the due date or under-reports their income, they will be subj..

In Korea, the calculation of global income tax is based on the taxpayer's income and is determined by applying the appropriate tax rates to the tax base. Additionally, taxpayers may be eligible for tax credits, which allow them to deduct specific amounts from their calculated income, subject to meeting certain requirements under the Income Tax Act and the Restriction of Special Taxation Act. Tax..

Foreign Tax Credit allows Korean residents to offset the tax paid or payable on foreign source income in a foreign country against their global income tax amount in the taxation period. This credit can also be included as necessary expenses when calculating the income amount accrued during the period, but this method is applicable only to business income. Scope of Deductibility Foreign source in..

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..

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..

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 ..

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..

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 ..

Understanding the Standard & Simplified Expense Rate System we will delve into the Standard & Simplified Expense Rate System for income tax in Korea. Whether you're a business operator or a taxpayer subject to this system, understanding the principles and calculations can significantly impact your tax return. The Standard Expense Rate Calculation All business operators are required to file their..

Understanding Taxation for Residents and Non-Residents Taxation in Korea is based on the classification of taxpayers into residents and non-residents. A resident is someone who is obligated to pay tax on their worldwide income in Korea, while a non-resident only pays tax on their domestic-source income. I. Taxpayer 1. Resident A resident is generally an individual who has either their domicile o..

Understanding Penalty Taxes in the Tax System penalties are imposed to ensure compliance with tax regulations and discourage tax evasion. Understanding penalty taxes is crucial for individuals and businesses to avoid legal consequences and maintain financial stability. Penalty Tax on Non-filing or Incorrect Filing Taxpayers who fail to submit their tax returns on time or inaccurately report thei..

Understanding Global Income Tax for Individuals Introduction we will delve into the concept of global income tax, a crucial aspect of taxation for individuals with income earned through economic activities in a foreign country. We will explore the filing period, necessary forms, and required documents for tax returns. What is Global Income Tax? Global income tax refers to a tax levied on the tot..