5 Things to Check When Filing Taxes in Korea
1. Are you salaried as a regular employee?
You don’t need to file taxes if you’re hired by an employer as a regular employee (정규직, i. e., you have joined the four major insurances and are paying the fees and income tax monthly from your salary). If this is your case, you do not have to file, but you should confirm that your employer files for you in February.
2. Multiple salary income
It very well may be the case that you have more than one employer in a given year. In that case, you need to submit a payslip (year-end settlement receipts) issued by a previous employer to the current employer you’re working for, before the end of the year The employer will then file your taxes with all of the salary income you’ve earned previously. Usually the tax rate is more than 6%.
3. Income as a freelancer
Many business owners prefer hiring freelance workers since they do not need to buy the national pension (a social security benefit program) or other insurances. The company should withhold 3.3% from your salary, and then they will pay that to the government. Then you still have to pay your annual taxes the following year based on your total income from all your combined jobs.
4. Mixed Income
You may have a salary income as a regular employee and simultaneously earn some money as a freelancer. If this is the case, once again you need to file yourself in May. You can confirm what your reported income was at a local tax office with your ARC (Alien Resident Card). Use this information to file your taxes without any missed amounts.
5. How many years can you consider in retrospect to file taxes?
You’re allowed to file your taxes for the last 5 years (so for now it’s 2010-2014). If you already have a tax bill noticed by a tax office, you can try to amend it.
Finally, whatever your case may be, you can file in May to amend the salary income filed by your employer last February, so do not miss your chance to file in May if you don’t like the tax audit. Any amendment or late report is bound to get some attention from the tax office so you need to prepare all of the tax evidence to reduce your tax. It would also be good to note that around five to six million sole proprietors file simultaneously in May -- so if your income is less than 50 million won, it may not be a serious issue to the tax office.
Don’t forget to file your taxes next May! If you have any questions, please contact email@example.com