What are the Personal Income Tax regulations in South Korea?
In South Korea, personal income tax is governed by a progressive tax system, but there are specific provisions for expatriates.
Personal Income Tax Rates
South Korea employs a progressive tax system for personal income, with rates increasing based on income levels. As of the latest information, the tax brackets for South Korean residents are:
- Up to KRW 12 million: 6%
- KRW 12 million to KRW 46 million: 15%
- KRW 46 million to KRW 88 million: 24%
- KRW 88 million to KRW 150 million: 35%
- Above KRW 150 million: 38%
These rates apply to the annual taxable income of South Korean residents. Taxpayers must file their income tax returns and pay taxes based on these progressive rates.
Special Tax Regime for Expats
- Flat Income Tax Rate: For expatriates working in South Korea, there is a special tax regime that offers a flat income tax rate of 19%.
- Duration: This flat rate applies for the first 5 years of employment in South Korea.
- Eligibility: The special rate is available to expatriates who meet specific criteria and choose this tax regime rather than the standard progressive tax rates.
This special tax provision for expatriates simplifies tax obligations and provides a clear, predictable tax rate for newcomers to South Korea. For further details on tax regulations and to ensure compliance, expatriates and residents are advised to consult with tax professionals or refer to official tax resources.
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