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Tax

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VAT Returns

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
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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.

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Tricor Group (Tricor) is the leading business expansion specialist in Asia, with global knowledge and local expertise in business, corporate, investor, human resource & payroll, corporate trust & debt services, fund administration, and governance advisory.

Tricor South Korea

8/F, Hanjin Heavy Industry Building,
4 Hangang-daero 71-gil, Yongsan-gu
Seoul 04322, South Korea

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