Taxes in Korea for Foreigners: The Taxes That Apply and What Opens Them

The taxes a foreigner actually meets

Korea does not have a single ‘foreigner tax’. A foreigner living in Korea meets the same taxes as a resident, and which ones apply depends on your situation:

• Income tax — on your salary and other Korean-source income (the tax almost every working foreigner pays)
• Local income tax — a 10% surcharge on your national income tax, withheld together with it
• Value added tax (VAT) — 10% on most goods and services you buy, already included in prices
• Property taxes — acquisition tax when you buy a home, and annual property tax while you own it
• Capital gains tax — on selling property, and in some cases on shares

This article is the map; the individual taxes are covered in depth in the linked guides. The two questions that decide most of it are your residency status and whether you own property.

Income tax — residency decides the scope

The core tax for foreign residents is Korean income tax, and your residency status decides how much of your income Korea may tax.

• Tax resident — you have a domicile in Korea or have maintained a place of residence for 183 days or more in a tax year. Residents are taxed on worldwide income.
• Non-resident — under 183 days and no domicile. Non-residents are taxed only on Korean-source income.

Rates are progressive, from 6% up to 45%, and the rate applies to the portion of income within each bracket after deductions. On top of the national tax, a 10% local income tax is charged, so most employees see two lines withheld monthly. For the full rate table and how the 183-day test is applied, see our does South Korea tax foreigners and resident vs non-resident tax guides.

The flat 19% option for foreign employees

Eligible foreign employees can choose a flat 19% income tax rate on employment income instead of the progressive brackets, under the Restriction of Special Taxation Act.

• Who it helps — usually employees at higher incomes, because the flat rate gives up most deductions and credits.
• Not tax-free — the 10% local surtax still applies, so the combined effective rate is around 20.9%.
• How it is chosen — through the employer’s year-end settlement or by the employee when filing; it cannot be combined with the 183-day test logic, it is a separate election.

If your income is modest, the progressive brackets with deductions are often cheaper than the flat rate. The comparison is covered in our 19% flat tax guide.

VAT and daily spending

Value added tax is 10% and is already included in the prices you see in shops, restaurants and most services. As a consumer you do not file VAT; it is charged by the seller and passed to the tax office.

Two things matter to foreigners specifically:

• Tax refunds for visitors — tourists can claim a VAT refund on goods they take out of the country, under the tax refund scheme. This is a refund of the VAT on purchases, not an income-tax matter. See our tax refund for visitors guide for how it works.
• Receipts matter if you later file — for self-employed or freelance foreigners, collecting VAT receipts supports the deductions claimed in an income tax return. Freelancers and business income are a separate track from employee withholding.

For most employees, VAT is simply the tax hidden inside prices and needs no action.

Property taxes when you own a home

Buying property in Korea opens a set of taxes that renters never see:

• Acquisition tax — payable when you acquire the property (buy, gift or inheritance), a percentage of the value that rises with property value and number of homes owned.
• Property tax — an annual local tax on the assessed value, plus a local education tax.
• Capital gains tax — on the gain when you sell, with rates and exemptions that depend on holding period, whether it is your only home, and your residency status. Non-residents face different rules and, in some cases, a tax clearance certificate before the sale proceeds can be sent abroad.

Property tax and the purchase process are separate from income tax, and the amounts depend on the property’s value and local rates. For the broader picture of tax by residency and the foreign income rules, our foreign income tax guide and income tax rates are the place to start before buying.

Where to check your own situation

Tax in Korea is applied case by case, and the two decisions that drive everything are residency and whether you have non-salary income.

1. Residency — confirm the 183-day test and domicile facts with our resident vs non-resident guide.
2. Salary — your employer withholds monthly and runs the year-end settlement each February; give them your foreign tax records so the correct deductions and foreign tax credit are applied.
3. Other income — if you have freelance work, rental income or overseas income, a global income tax return may be required in May. See global income tax return and foreign income.
4. Treaties — if you are from a country with a treaty (such as the US), withholding and credit rules can change the outcome; the US–Korea tax treaty is one example.

Authoritative sources are the National Tax Service (nts.go.kr) and the Income Tax Act. Confirm figures for the year you file, since brackets and amounts are revised annually.