Daejeon

๐Ÿ’ฐ

Taxation

Sections

Overview of Taxation in South Korea

South Korea has a centralized tax system, meaning most taxes are administered at the national level by the National Tax Service (NTS). However, local governments, including Daejeon, also levy certain taxes, such as property taxes and local income taxes. Understanding the tax system is crucial for compliance and financial planning.

Types of Taxes in South Korea

  1. Income Tax

    • Levied on individuals and businesses earning income in South Korea.
    • Includes both national income tax and local income tax (a surcharge on national income tax).

  2. Value-Added Tax (VAT)

    • A consumption tax applied to goods and services.
    • Standard rate: 10%.

  3. Property Tax

    • Levied on property owners, including real estate and vehicles.
    • Administered by local governments, including Daejeon.

  4. Acquisition Tax

    • Paid when acquiring property, such as real estate or vehicles.

  5. Capital Gains Tax

    • Applied to profits from the sale of property or investments.

  6. Inheritance and Gift Tax

    • Levied on inherited or gifted assets.

  7. Local Taxes

    • Includes local income tax, property tax, and other municipal taxes specific to Daejeon.

Income Tax in South Korea

National Income Tax Rates (2023)

Income tax in South Korea is progressive, meaning higher income is taxed at higher rates. The rates are as follows:

| Taxable Income (KRW) | Tax Rate | |----------------------------|------------| | Up to 14,000,000 | 6% | | 14,000,001 โ€“ 50,000,000 | 15% | | 50,000,001 โ€“ 88,000,000 | 24% | | 88,000,001 โ€“ 150,000,000 | 35% | | 150,000,001 โ€“ 300,000,000 | 38% | | 300,000,001 โ€“ 500,000,000 | 40% | | 500,000,001 โ€“ 1,000,000,000| 42% | | Over 1,000,000,000 | 45% |

Local Income Tax

  • Local income tax is a flat 10% surcharge on the national income tax.
  • For example, if your national income tax is KRW 1,000,000, you will pay an additional KRW 100,000 as local income tax.

Filing and Payment

  • Who Needs to File?
    Residents (those who live in South Korea for 183 days or more) are taxed on worldwide income. Non-residents are taxed only on income earned in South Korea.

  • Deadlines

    • Annual income tax return: May 31 of the following year.
    • Local income tax return: Typically due in June.

  • How to File

    • Online: Use the National Tax Serviceโ€™s Hometax platform (www.hometax.go.kr).
    • In-person: Visit the Daejeon Regional Tax Office (details below).

Value-Added Tax (VAT)

  • Rate: 10% on most goods and services.
  • Who Pays?
    Businesses are responsible for collecting VAT from customers and remitting it to the government.
  • Filing and Payment
    • VAT returns are filed quarterly (January, April, July, and October).
    • Use the Hometax platform or visit a local tax office.

Property Tax

  • What is Taxed?
    • Real estate (land and buildings).
    • Vehicles.
  • Rates
    Property tax rates vary depending on the type and value of the property. For example:
    • Residential property: 0.1% to 0.4%.
    • Commercial property: Higher rates may apply.
  • Payment
    • Property tax bills are issued in July and September.
    • Payments can be made online, at banks, or at local government offices.

City-Specific Considerations in Daejeon

While the tax system is largely uniform across South Korea, here are some Daejeon-specific notes:

  1. Local Tax Office

    • The Daejeon Metropolitan City government oversees local taxes, including property tax and local income tax.
    • The city provides support for taxpayers, including assistance for expatriates and non-Korean speakers.

  2. Special Economic Zones

    • Daejeon is a hub for research and development, with several government-supported initiatives. If you are working in a special economic zone or a government-supported project, you may qualify for tax incentives.

  3. Vehicle Tax

    • If you own a car in Daejeon, you will pay an annual vehicle tax. Bills are typically issued in June and December.

How to Pay Taxes in Daejeon

  1. Online Payment

    • Use the National Tax Serviceโ€™s Hometax platform (www.hometax.go.kr).
    • Payments can be made via bank transfer, credit card, or mobile payment apps.

  2. In-Person Payment

    • Visit a local tax office or a designated bank.
    • Bring your tax bill and identification.

  3. Automatic Bank Transfer

    • You can set up automatic payments for recurring taxes, such as property tax or vehicle tax.

Tax Assistance in Daejeon

  1. Daejeon Regional Tax Office

    • Address: 123 Dunsan-ro, Seo-gu, Daejeon.
    • Phone: +82-42-481-2114.
    • Services: Assistance with income tax, VAT, and other national taxes.

  2. Daejeon Metropolitan City Tax Division

    • Address: 100 Daejeon-ro, Jung-gu, Daejeon.
    • Phone: +82-42-270-4114.
    • Services: Assistance with local taxes, including property tax and vehicle tax.

  3. Hometax Platform

    • Website: www.hometax.go.kr.
    • Features: File tax returns, pay taxes, and access tax records.
    • Languages: Korean and limited English support.

  4. Korean Taxpayers Association

    • Provides resources and support for expatriates and foreign residents.

Tips for Foreign Residents in Daejeon

  1. Understand Residency Status

    • Your tax obligations depend on whether you are a resident or non-resident. Ensure you understand your status.

  2. Keep Records

    • Maintain records of income, expenses, and tax payments for at least five years.

  3. Seek Professional Help

    • If you are unfamiliar with the Korean tax system, consider hiring a tax consultant or accountant. Many firms in Daejeon specialize in assisting expatriates.

  4. Language Support

    • While most tax documents are in Korean, the NTS and local offices offer limited English support. Bring a translator if needed.

Key Deadlines

  • Income Tax Filing: May 31.
  • Local Income Tax Filing: June.
  • VAT Filing: Quarterly (January, April, July, October).
  • Property Tax Payment: July and September.
  • Vehicle Tax Payment: June and December.

By following this guide, you should be well-prepared to handle your tax obligations in Daejeon, South Korea. If you have specific questions or need further assistance, donโ€™t hesitate to contact the local tax office or consult a professional.