🇰🇷 South Korea tax

• Who: Foreign national employee or director with Korean employment income

Foreign employees who first start work in Korea on or before 31 December 2026 can elect a 19% flat rate on employment income for 20 years from the tax year of first work in Korea. A government bill published on 3 August 2026 proposes raising the rate to 21% and extending the period through 31 December 2029; it is a proposal, not the law in force. ^{1 2 3 4 5}

Taxed on

Employment income (gross salary), separately taxed at a flat rate instead of progressive rates.

Who it applies to

• Foreign national employee or director with Korean employment income.
• First starts work in Korea on or before 31 December 2026 (Restriction of Special Taxation Act Art. 18-2(2)).
• Election applies to employment income received up to the end of the tax year ending within 20 years of the first day of work in Korea.
• Applies to the tax office or employer; withholding at 19% is possible.
• Proposed change, not law: the 2026 Tax Revision Bill published by the Ministry of Finance and Economy on 3 August 2026 would raise the preferential rate for foreign workers from 19% to 21% and extend the application period by three years, through 31 December 2029.

Exclusions

• Not available to employees of related-party (special-relationship) companies, other than the foreign-invested enterprises specified by decree; the National Tax Service gives the example of a worker who holds 30% or more of the employer's shares during the employment.
• Electing the flat rate removes non-taxation, deductions, reductions and tax credits under the Income Tax Act and the Special Taxation Act, apart from certain welfare-type benefits specified by decree; employer-paid health and employment insurance are not tax-exempt under the flat rate (NTS guide). The income is not added to comprehensive income.

Tax residence

Residents (domicile or residence in Korea) are taxed on worldwide income; non-residents only on Korean-source income.

Visas

Applies to foreign employees of any visa category with Korean employment income; not tied to a visa.

Other taxes

Local income tax and national health, pension and employment insurance contributions apply separately.

Checked against official sources on 12 Oct 2026Change log

Deadline 31 December 2026: only foreign engineers whose first day of work in Korea is on or before that date qualify. They get a 50% income tax reduction on pay from a Korean employer for 10 years from their first day of work. The 70% rate for materials, parts and equipment engineers was open only to people who started work on or before 31 December 2022. ^{6 7 1}

Taxed on

Income tax on employment income received for work provided in Korea to a domestic employer: 50% of the tax is reduced on income arising up to the month containing the tenth anniversary of the first day of work in Korea.

Who it applies to

• Foreign engineer as defined by presidential decree: a foreign worker providing technology under an engineering technology import contract, or a holder of a bachelor's or higher science or engineering degree with overseas research and development experience (National Tax Service guide).
• First day of work in Korea on or before 31 December 2026 (Restriction of Special Taxation Act Art. 18(1)).
• The pay is employment income for work provided in Korea to a domestic employer.
• From employment income paid on or after 28 February 2025, outstanding overseas talent under Article 28(1) of the Advanced Industry Talent Special Act can also claim (National Tax Service guide).
• The reduction is applied for through the employer (withholding agent), which withholds the reduced amount (Art. 18(3) and (4)).

Exclusions

• Materials, parts and equipment engineers get 70% for the first 3 years and 50% for the following 2 years only if their first day of work in Korea was on or before 31 December 2022; later starters get the general 50% for 10 years.
• Pay from an employer outside Korea is not covered: the reduction is for work provided to a domestic employer.
• Cannot be combined with the 19% flat rate: electing the flat rate removes income tax reductions.
• Applies to employment income only; social insurance is separate.

Tax residence

Applies to employment income of the worker in Korea.

Visas

Independent of visa type.

Other taxes

Individual local income tax is reduced by 10% of the income tax reduction (Restriction of Special Local Taxation Act Art. 167-2, applied to 31 December 2026). Social insurance contributions are separate.

Checked against official sources on 12 Oct 2026Change log

• On: Foreign-source income that is paid in Korea or remitted to Korea
• Who: Foreign national (not a Korean citizen) who is a Korean tax resident

A foreign resident whose total period of domicile or residence in Korea is five years or less in the ten years before the end of the tax period is taxed on foreign-source income only to the extent it is paid in Korea or remitted to Korea. ^{9 10}

Taxed on

Foreign-source income that is paid in Korea or remitted to Korea; Korean-source income and all other income is taxed in full under the progressive income tax.

Who it applies to

• Foreign national (not a Korean citizen) who is a Korean tax resident.
• Sum of periods with a domicile or residence in Korea over the 10 years before the end of the taxable period is 5 years or less.
• Resident means having a domicile in Korea or a residence of 183 days or more.

Exclusions

• After more than five years of domicile or residence within the ten-year look-back, foreign-source income is taxed on a worldwide basis as for Korean residents.
• Income not paid or remitted into Korea stays outside the Korean base for qualifying foreigners.

Days in the country

• At least 183 days in continuous residence in Korea · A person with no domicile who has a residence in Korea for 183 days or more is a resident

Tax residence

The five-year test is counted over the ten years before the end of the relevant taxable period; non-residents are taxed only on Korean-source income (article 3(2)).

Visas

Applies by tax residence status and nationality, not by visa category.

Other taxes

Local income tax, VAT and social insurance apply separately; see “Optional flat tax rate for foreign employees” and “Korea progressive comprehensive income tax rates” for employment tax rates.

Checked against official sources on 10 Oct 2026Change log