Personal Income Tax in North Korea
North Korea operates a progressive personal income tax (PIT) system with very limited practical application for local citizens. Foreign workers are generally subject to a flat ~20% rate on DPRK-source income. This guide outlines the simplified estimated tax structure based on available information.
Tax Residency
Tax residency in North Korea is determined by:
- Being physically present in North Korea for more than 183 days in a calendar year
- Having a permanent residence in North Korea
- Being a DPRK citizen (local nationals are subject to state-controlled taxation)
Resident individuals are taxed on their worldwide income. Non-residents are taxed only on DPRK-source income. Foreign workers are generally treated as non-residents and subject to flat withholding.
Personal Income Tax Rates (2026 Estimated)
North Korea's PIT system uses progressive brackets simplified as follows (apply to monthly income in KPW):
| Monthly Taxable Income (KPW) | Tax Rate |
|---|---|
| 0 – 300,000 | 0% |
| 300,001 – 500,000 | 5% |
| 500,001 – 1,000,000 | 10% |
| Above 1,000,000 | 20% |
Note: These rates are approximate/simplified. North Korea has very opaque tax information. Foreign workers typically pay ~20% flat on DPRK-source income.
Foreign Workers
Foreign employees working in North Korea are generally subject to a flat income tax rate of approximately 20% on DPRK-source income. This withholding is typically handled by the employer or the state-controlled enterprise.
Exemptions and Allowances
- Basic Exemption: Approximately 300,000 KPW per month threshold for local workers
- Foreign Workers: Limited deductions; tax is typically levied on gross income
Employment Income
Employment income includes salaries, wages, and bonuses paid in KPW or foreign currency. Employers are responsible for withholding and remitting income tax to the tax authorities.
Filing Requirements
- Local Workers: Tax withheld at source by state enterprises
- Foreign Workers: Withholding by employer; annual reconciliation may apply
- Self-Employed: Limited scope; most economic activity is state-controlled
Penalties
- Late filing: Penalties apply under state tax law
- Late payment: Interest and penalties
- Non-compliance: May result in business restrictions or visa issues for foreigners