Under the Value-Added Tax Law, a company is required to file a VAT return on a quarterly basis within 25 days from the end of each quarter. Tricor South Korea provides the following tax services:
- Support the issuance of sales VAT invoices based on information provided by clients
- Support the issuance of zero-rating VAT invoices per the company's instruction
- Prepare supporting documents for zero-rating transactions
- Review sales VAT invoices & purchase VAT invoices provided by clients
- Prepare VAT invoice summary by customer and by vendor
- Support the preparation of VAT returns
- Prepare English summary of VAT returns
Class B Taxpayers’ Association
Under the Korean tax law, employment income is classified either as Class A or Class B. Class A income is employment income received inside South Korea. Class B income is employment income received from a source outside South Korea and not deducted by an entity within South Korea.
Class A income is subject to monthly withholding payroll tax by the employer. If the employer fails to perform the withholding obligation, 10% of the concerned tax will be assessed on the employer as penalty. Since, in the case of Class B income, the employer paying the income does not necessarily reside in South Korea, the employee himself is responsible for paying his personal income tax. A Class B income earner may either join a Taxpayers' Association to pay monthly withholding payroll tax or may wait and file an annual tax return in May of the following year. If a Class B income earner joins a Taxpayers' Association and pay taxes monthly through the association, he would receive a 5% tax credit, whereas no credit is available in the event of filing an annual tax return. However, if he has Class A and Class B income, he must file an annual tax return.
Please note that if the salary income paid to the employees is deducted from the taxable income of a foreign corporation's permanent establishment in South Korea to which they belong, the salary income will be categorized as Class A income, not Class B income, even though the income is paid directly by the foreign corporation's head office in a foreign country.