Tax reduction for "Expat Tech. Professionals": Get 50% Tax Reduction
Income tax reduction for foreign technical professionals
For the labor income earned by *Foreign technical professionals who provide labor to Korean nationals in Korea and who first provided labor before December 31, 2023, a 50% reduction in income tax is applicable from the date of initial labor provision until the month in which 5 years have passed.
* "Foreign technical professionals" refer to individuals who do not hold Korean nationality and provide technology in Korea under an engineering technology transfer contract specified in Article 9(1) of the Enforcement Rule of the Special Taxation Act. It also includes individuals who meet all of the following requirements:
A. Hold a bachelor's degree or higher in natural sciences, engineering, or medicine.
B. Have at least 5 years of research and development or technological development experience at foreign universities and their affiliated research institutes, national research institutes, or corporate research institutes (including overseas research institutes).
C. Do not have a kinship relationship or management control relationship with the company providing labor as of the end of the tax year (excluding the requirements of Article 1-2(4)(1)(a)(iv) of the National Flag Law).
D. Be employed as a researcher in an organization or department specified in Article 16-3(2) of the Immigration Control Act, excluding administrative affairs.
For the labor income earned by foreign technical professionals in materials, parts, and equipment-related fields who first provided labor before December 31, 2022, a 70% reduction in income tax is applicable from the date of initial labor provision until the month in which 3 years have passed. From the first day of the following month until the month in which 2 years have passed, a 50% reduction in income tax is applicable.
In this case, "foreign technical professionals in materials, parts, and equipment-related fields" refer to individuals among those defined in ① who work for specialized leading companies (according to Article 16 of the Special Measures Act for Strengthening Competitiveness in Materials, Parts, and Equipment Industries).
Foreign technical professionals seeking income tax reduction must submit a tax reduction application to the head of the tax office with jurisdiction over withholding tax through the withholding agent(Employer) by the 10th day of the month following the month in which the labor provision date falls.
When withholding income subject to reduction, the withholding agent deducts the reduced amount according to the above from the income tax to be withheld.
**Sources: National Tax Service, Special taxation act Article 18.
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