Foreign workers no exception in filing year-end taxes

The time has come for workers to settle their year-end taxes, and wage-earning foreign workers are no exception, the tax agency said Wednesday. It recommended referring to guide materials such as the agency’s YouTube video covering foreign taxpayers’ year-end settlement and applying for all advantageous regulations, exemptions, deductions and tax credits.

“Both domestic and foreign employees should do the year-end tax settlements for income earned last year no later than the date on which the wages for February this year are paid,” the National Tax Service (NTS) announced in a press release.

Foreign employees’ year-end tax settlements are basically the same as those of domestic employees. They may pay additional taxes or get tax refunds based on the difference between the amount of tax determined and the amount of withholding tax prepaid by their employers.

However, they are not eligible for the income deduction on savings for housing purchases, and there are also special taxation regulations that apply only to foreign taxpayers, such as the application of a 19 percent flat tax rate and income reduction and exemption for foreign engineers.

The tax agency noted that with the 19 percent flat tax rate and the income reduction and exemption for foreign engineers, foreigners who have worked in Korea for a long period can also take advantage of these special regulations.

“We provide various services so that foreign employees working in Korea can do their year-end tax settlements without difficulty,” the NTS noted.

The number of foreign employees doing the year-end tax settlement increased to 544,000 in 2022 from 505,000 in 2021. The amount of taxes filed recorded the highest-ever 1.19 trillion won. Their average annual salary was 31.79 million won ($24,000).

The NTS advised foreign taxpayers to check its “Easy Guide for Yearend Tax Settlement” and “Year-end Tax Settlement Manual for Foreigners” provided on the NTS’ English website. The latter is provided in not only English but also in Chinese and Vietnamese. They can also call the English helpline for foreigners on 1588-0560. The NTS also uploaded videos to its YouTube channel explaining how foreign employees can complete year-end tax settlements.

Among the foreign employees who did the year-end tax settlements last year, Chinese accounted for 34.5 percent, followed by Vietnamese at 8.2 percent, Nepalese at 6.2 percent, Indonesians at 5.1 percent and Americans at 4.9 percent.