While in Korea

Year-end Tax Settlement

Pedro is a foreign national who works in Korea as a chef. He explains to Huong, a Vietnamese who recently got a job in Korea, how foreign residents can file their income taxes in the country.

Written by • Jung Joo-ri Illustrated by • Yuhaill

JessieIt feels like only yesterday since I arrived in Korea. I can’t believe it’s been almost a year now.

PedroI think time flies quickly when you live here. I’m getting excited just thinking about potentially getting the socalled 13th month’s income of the year.

HuongThe 13th month’s income? My coworkers are also talking about it at work. What is it?

PedroAt the beginning of a new year, Koreans calculate their income taxes for the past year, and either get part of their taxes back or need to pay more. They may or may not get a tax refund, which they call “income from the year’s 13th month.” Foreign residents who earn income, including those in religious occupations, can also file their income taxes.

Su-hyeonThat’s right. Both Korean nationals and foreign residents can file income taxes from mid-January to the end of February every year. They must submit documents to their workplaces to get tax deductions. The more they spent on things eligible for tax breaks, the more likely they are to get tax refunds.

PedroAs usual, Su-hyeon knows a lot. Huong, you probably don’t know this well since you’re a new employee. I’ll tell you how foreign residents can file their income taxes in Korea.

HuongThat’s great. So how does it work?

PedroFirst, you have to look at your expenditures from the past year. If you have health insurance and made payments at hospitals or pharmacies, you can get a tax refund. You can also get a refund depending on your cash and debit and credit card spendings.

JessieWhat about rent? I pay quite a lot of rent every month.

PedroUnfortunately, foreign residents are ineligible for a tax refund for rent. But they can get tax breaks for donations or eyeglass purchases, so please meticulously check your expenditures for items eligible for tax breaks. If you have a family that you financially support, you can get tax rebates for spending on things such as your children’s education. Just submit to your workplace a document verifying your family relations.

Su-hyeonPedro, you seem like an expert on tax rebates (smiles). But getting the necessary documents seems to be a hassle.

PedroDon’t worry. It’s easy if you use www.hometax.go.kr, a site run by the National Tax Service. Once you make a digital certificate using the ID number on your alien registration card and log in, you can access all your relevant personal information. The categories that apply to you for tax rebates are written in English, but most others are written in Korean. So I recommend getting help from a Korean when using the site for the first time.

JessieIt must be so convenient to check all of your personal information online. Korea surely is an internet powerhouse.

PedroI know, right? You can check and download your personal data. If you find any data missing on the site, you can call the relevant organization and request it.

Su-hyeonYou sound like an expert on filing tax returns. The information is hard to grasp even for locals, yet you explain it in a manner easy to understand.

PedroOh, it’s nothing. If you want to learn more about the categories that apply to foreign residents for tax refunds, I recommend going to the English website of the National Tax Service: ( www.nts.go.kr/eng ). It has a guide on year-end tax filing for foreign residents, an auto computing program for tax filing and more, so it’s super convenient.

HuongI see. So if I file a tax return, when can I get my refund?

PedroUsually you get it in March or April. But the date differs depending on your workplace, so you can get more accurate information from the staff at your office in charge of tax returns.

JessieI see. It must be great to not have to pay more taxes and get a tax rebate instead. I can see why they call it the monthly salary of the year’s 13th month.

Su-hyeonRight. I hope you get your 13th month’s salary, Pedro (smiles).

PedroThank you. Honestly, I might have to pay more taxes instead of getting a tax refund depending on my spending last year. But if I do get a refund, I’ll buy you guys a meal. So think about what you want to eat.

While in Korea

Year-end Tax Settlement

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