NON-RESIDENT INCOME TAXATION
1. Summary of Income Taxation for Non-Residents
2. Tax Treaties
1. Summary of Income Taxation for Non-Residents
Individual income tax
individual income taxation
¡¡ ¡¡ ¡¡ ¡¡ Resident ¡¡ ¡¡ Non-resident ¡¡ ¡¡
Definition residence or domicile in Korea any person not deemed a resident
for more than one(1) year ¡¡ ¡¡ ¡¡ ¡¡
Taxable place residence or domicile ¡¡ place of business (fixed base)
¡¡ ¡¡ ¡¡ or place or income source ¡¡
Tax liability worldwide income ¡¡ income from sources within Korea
¡¡ ¡¡ ¡¡ ¡¡ ¡¡ ¡¡
Methods of taxation Global taxation ¡¡ Global taxation (in case of fixed base)
schedular taxation for capital gains, schedular taxation for capital gains,
retirement income, and timber income retirement income, and timber income
withholding taxation ¡¡ withholding taxation ¡¡
Taxation on Non-Residents with a Fixed Base  (in Thousand Won)
Taxable income Tax rates and brackets ¡¡
(tax base) ¡¡ ¡¡ ¡¡
Over Not over ¡¡ ¡¡ ¡¡
¡¡           10,000 8% ¡¡ ¡¡
          10,000           40,000 800 + 17% of amount over 10,000
          40,000           80,000 5,900 + 26% of amount over 40,000
          80,000 ¡¡ 16,300 + 35% of amount over 80,000
Taxation on Non-Residents without a Fixed Base
Items of income ¡¡ Current domestic rates ¡¡
interest 25%
dividends 25%
Real estate rental income **
lease income 2%
business income 2%
independent personal services 20%
dependent personal services **
retirement income **
capital gains income **
timber income **
royalties 25%
capital gains from security transactions lesser of 10% of sales or 25% of the gains
miscellaneous income 25%
** Tax rates applied to non-residents without a fixed base 
are identical to those applied to non-residents with a fixed base.
Corporate income tax
corporate income taxation
¡¡ ¡¡ ¡¡ ¡¡ Resident corporation ¡¡ Non-resident corporation ¡¡
Definition a corporate business entity with its a corporate business entity with its
head of main office in Korea head of main office outside Korea
Taxable place head or main office ¡¡ permanent establishment or place of
¡¡ ¡¡ ¡¡ income source ¡¡
Tax liability worldwide income ¡¡ income from sources within Korea
¡¡ ¡¡ ¡¡ ¡¡ ¡¡ ¡¡
Taxation on Non-Resident corporations with Permanent establishment (in Won)
Taxable income Tax rates and brackets ¡¡
(tax base) ¡¡ ¡¡ ¡¡
Over Not over ¡¡ ¡¡ ¡¡
¡¡  100 million  13% ¡¡
 100 million  ¡¡ 13 million + 25% of the amount over
¡¡ ¡¡ 100 million Won ¡¡
Taxation on Non-Resident corporations without Permanent establishment 
Items of income ¡¡ Current domestic rates ¡¡
interest 25%
dividends 25%
Real estate rental income *
lease income 2%
business income 2%
independent personal services 20%
capital gains income *
timber income *
royalties 25%
capital gains from security transactions lesser of 10% of sales or 25% of the gains
miscellaneous income 25%
* Tax rates applied to non-resident corporations without a permanent establishment
are identical to those applied to non-resident corporations with a permanent 
establishment.
2. Tax Treaties
As of the end of April, 2005, Korea has entered into bilateral tax treaties (Conventions
for the avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income) with 62 countries all over the world.
In addition to the primary objective of avoiding international juridical double taxation,
tax treaties serve purposes such as promoting exchanges of advanced technology
and capital from abroad as well as encouraging business expansion of domestic
companies in foreign countries.
Withholding Tax Rates in Korea
The normal withholding tax rates on the Korean-source income of non-residents are
as follows.
Korean-source income ¡¡ Withholding Tax rates ¡¡
interest 25%
dividends 25%
royalties 25%
miscellaneous income 25%
gross revenue from business 2%
compensation for personal services 20%
gains developed from security transactions lesser of 10% of sales or 25% of the gains
In addition to the withholding tax rates given above, inhabitant surtax of 10% is
assessed on these withholding taxes.