The Korea Herald

지나쌤

Foreigners baffled by complex process for year-end tax settlement

By Yonhap

Published : Jan. 30, 2019 - 11:53

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At the beginning of each year, a growing number of foreign migrant workers in South Korea are confused and frustrated by the mandatory task of the year-end tax settlement.

Under the regulations of the National Tax Service, all South Korean salaried employees are obliged to file a year-end tax settlement in January for their previous year's income for tax refunds or additional tax payments in February.

Foreign workers are no exception to the rule, regardless of nationality and the length of stay, if they have earned income in South Korea, the NTS said Wednesday.


(Yonhap) (Yonhap)

According to NTS data, a total of 558,000 foreigners here filed year-end tax settlements for their 2017 income, which amounted to 770.7 billion won ($698 million). Compared with the 2013 tally, the number of foreigners increased 16.2 percent, with their reported income surging 27.9 percent.

Starting this year, foreign religious people can also file year-end tax settlements.

Tax deduction items are mostly the same but some items, like housing finance deductions and monthly rent deductions, are not applied to foreigners.

In addition, foreigners are entitled to some special provisions on taxation, including a 19 percent flat tax rate, NTS officials said.

The NTS provides an exclusive consultation service for foreigners via www.nts.go.kr/eng or by calling 1588-0560, as well as an automatic calculation program for year-end tax settlements at the website.

As the NTS foreign language service is offered only in English, however, foreign workers of various nationalities have difficulty gaining practical help.

A Chinese national who works at a language institute in Seoul's Jongno district said she gave all her personal information, including her financial authentication certificate and bank ID and password, to her Korean boss for year-end tax settlement.

"I was asked to file a year-end tax settlement but had no idea at all about how to handle that. Eventually, my Korean boss did the job on my behalf with my personal information," the Chinese national said.

In case of foreign workers at small workplaces, their frustration is far bigger due to the absence of information or assistance, unfamiliar terms and complicated procedures.

A counselor at a foreigner support center in Seoul said that many foreign workers don't know whether they are liable to file year-end tax settlements.

"Most foreign workers tend to have their employers file year-end tax settlements on their behalf," said Ahn Dae-hwan, head of the Korea Migration Foundation.

"Many of them still forgo the procedure because they believe there won't be much tax refund due to their small wages and because the procedures are very complicated." (Yonhap)