Social security taxGift, wealth, estate, and/or inheritance taxReal estate taxSales/VAT taxUnemployment taxOther taxes
Social security tax1
Are there social security/social insurance taxes in Korea? If so, what are the rates for employers and employees?
||0.80% to 1.40%
||1.35% to 1.95%|
|Industrial accident insurance
||0.60% to 35.40%
||0.60% to 35.40%|
|National health2 insurance
||9.0378975% to 44.4378975%
||17.225795% to 52.625795%|
The current contribution rate for National Pension is 9 percent of an employee’s gross salary, with 4.5 percent being contributed by the employer and 4.5 percent by the employee via payroll withholding. The monthly contributions are capped at KRW175,050 a month for each. Expatriates employed in businesses with at least one employee are required to join the national pension plan. However, in cases where Korea has a totalization agreement with the expatriate’s home government, the provisions of the totalization agreement will supersede the National Pension Law of Korea.
Expatriates with D-7, D-8, D-9 visa types are required to participate in Employment Insurance unless they are exempt under reciprocity principle (that is the expatriate’s home country does not require participation by Korean nationals in its equivalent social insurance). The percentage for the employee is 0.55 percent whereas the employer’s percentage ranges from 0.8 percent to 1.4 percent depending on the number of employees at the business. The monthly contribution is not capped.
Expatriates are also subject to Industrial Accident Insurance unless exempt under applicable totalization agreements. The required contribution is borne entirely by the employer. The applicable rate ranges from 0.6 percent to 35.4 percent of an employee’s monthly compensation depending on the type of industry. In the case of a business service industry, the applicable premium rate is 0.6 percent. The monthly contribution is not capped.
Effective 2006, expatriates’ participation in National Health Insurance is mandatory unless they remain on overseas payroll with the associated compensation costs not charged back to Korea (that is Class B income). Exemption is available if expatriates are covered by employer-sponsored foreign medical insurance. The percentages for employer and employee are 3.1378975 percent (including geriatric long-term care insurance rate) for each. There is an income ceiling of KRW78.10 million per month for the monthly contributions.
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Gift, wealth, estate, and/or inheritance tax
Are there any gift, wealth, estate, and/or inheritance taxes in Korea?
A national tax is assessed on the value of property acquired by inheritance or gift, net of certain allowable deductions. The tax rates are progressive, up to a maximum of 50 percent for inheritance and gift tax.
Beneficiaries not domiciled in Korea are subject to tax only if the particular property is located in Korea.
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Real estate tax
Are there real estate taxes in Korea?
Property tax is imposed on land, buildings, housing, ships, and aircraft by municipal government on such properties located in the cities and counties.
The property assessment date is 1 June of each year, and the payment due date is from 16 July to 30 September. Property tax on residential houses ranges from 0.5 percent to 4 percent. Luxury residences, apartments, and houses may be subject to additional property taxes that are assessed by regional tax offices and payable by 15 December.
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Are there sales and/or value-added taxes in Korea?
Value-added tax rate is 10 percent.
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Are there unemployment taxes in Korea?
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Are there additional taxes in Korea that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
A national tax is imposed on the seller of securities, generally, at a rate of 0.5 percent of the value of the securities sold. This tax is payable by the seller.
In general, the national government requires that revenue stamps be affixed to specified documents including property transfer documents, loan contracts, certain receipts, and articles of incorporation. The cost of a revenue stamp ranges from KRW100 to KRW350,000, depending on the type of document and on the amount mentioned therein, if any.
Customs duties may be levied on goods entering Korea. The duty rates vary according to the nature of the goods.
Persons obtaining licenses under local tax law are required to pay an annual license tax for each kind of license. The tax ranges from KRW3,000 to KRW90,000 depending on the type of license and the locality.
Individuals resident in Korea are assessed a per capita resident tax by their local government in the amount of KRW10,000 or less.
Individuals liable for payment of income tax in Korea are assessed an additional resident tax at the rate of 10 percent of the income tax amount.
According to new tax legislation, if a resident has held foreign financial accounts and the aggregate value of cash and listed stocks held in the accounts exceed 1 billion won any one day during the tax year, he/she must report the information of the financial accounts to Korean tax authority.
1National Pension Corporation, March 2012.
2The rate includes Geriatric Long-Term Care Insurance surcharge, which is assessed at a rate of 6.55 percent of the National Health Insurance contribution.