How to Adjust Preliminary Income Tax Payments in Korea for Reduced 2024 Earnings
If you’ve received a preliminary income tax notice (중간예납안내문) and a payment notice in Korea, it generally requires you to pay half of the income tax amount that you reported for the previous year (2023). However, if your income in 2024 has decreased by more than 20% compared to 2023, you may be eligible to request an adjustment or exemption. Here’s how to handle this situation:
1. Understand Why the Preliminary Tax Payment Is Required
The preliminary income tax payment is designed to help taxpayers distribute their tax burden by pre-paying a portion of their expected income tax for the current year. It’s based on your previous year’s reported income, assuming similar income levels.
2. What to Do If Your Income Has Decreased Significantly
If your 2024 income is significantly lower (by 20% or more), you can request a reduction or exemption from the preliminary payment. Here’s how:
A. Prepare Documentation
You’ll need to provide evidence of your reduced income. This may include:
Bank statements showing decreased income receipts.
Invoices or contracts reflecting lower work volume or reduced payment.
A detailed statement explaining the circumstances of your decreased earnings.
B. Submit a Request for Adjustment
Contact the National Tax Service (NTS) or visit your local tax office to submit a request for adjustment. You can:
File a "Preliminary Tax Payment Reduction Request" (중간예납세액 감면 신청서).
This form allows you to explain and request a reduction based on your current income situation.
Provide the supporting documents prepared earlier.
💡 Tip: You may also submit the request online through the Hometax system if you're registered.
C. Await Approval
Once submitted, the tax office will review your request. If approved, your preliminary payment will be reduced or waived, depending on the circumstances.
3. What If You Don’t Request an Adjustment?
If you don’t apply for a reduction and simply pay the preliminary amount, you can:
Reflect the overpayment when filing your 2024 annual income tax return (in May 2025).
Any excess payment will be refunded or credited toward future tax liabilities.
💡 However, requesting a reduction now helps manage your cash flow better.
4. Important Deadlines
The payment deadline for the preliminary tax is usually November 30 of the current year.
Ensure your adjustment request is submitted before this deadline to avoid penalties or interest.
5. Consult a Tax Professional
If you’re unsure about the process or need assistance with documentation, consider consulting a tax advisor. They can guide you through the procedure and help maximize your chances of approval.
By proactively addressing your situation with the NTS and providing clear evidence of reduced income, you can potentially lower or eliminate your preliminary tax payment obligation for 2024.
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