South Korea Tax Filing Guide

Year-End Settlement — 연말정산 (Employees)

• Who files: The year-end settlement (연말정산) is the tax reconciliation process for the salaried employees (근로소득자). The employer processes the settlement on behalf of the employee and adjusts the monthly withholding tax (원천징수) to match the annual tax liability.
• Deadline — End of February: The employee must submit the tax deduction documents (소득공제 증빙서류) to the employer by the end of January. The employer must complete the year-end settlement and submit it to the tax office (세무서) by the end of February (February 28 or 29).
• Key deductions: The employee may claim: the personal deduction (인적공제) — KRW 1,500,000 per family member; the national pension deduction (국민연금공제); the health insurance deduction (건강보험공제); the housing subscription account deduction (청약저축 공제) — up to KRW 3,000,000/year; the education expense deduction (교육비 공제); the medical expense deduction (의료비 공제) — the amount exceeding 3% of the gross income; the credit card deduction (신용카드 공제) — 15% of the amount exceeding 25% of the gross income, up to KRW 3,000,000; and the pension savings tax credit (연금저축 세액공제) — up to KRW 7,000,000.
• Simplified procedure: Since 2020, the NTS provides the simplified year-end settlement (간소화 서비스) through the Hometax system — the employee may download the pre-filled deduction data from the Hometax website and submit it to the employer electronically.

For example: an employee with an annual salary of KRW 50,000,000 who submits the expense receipts for the credit card spending (KRW 20,000,000), the medical expenses (KRW 2,000,000), and the pension savings (KRW 4,000,000) may receive a tax refund of approximately KRW 500,000–1,000,000 through the year-end settlement.

Global Income Tax Return — 종합소득세 신고 (May)

• Who files: The following individuals must file the global income tax return (종합소득세 신고) by the end of May: the self-employed (사업소득자); the rental income earners; the freelance and the gig workers; the individuals with the investment income (the interest, the dividends, the capital gains) exceeding KRW 20,000,000 per year; and the foreign residents with the Korean-source income.
• Deadline — 31 May: The tax return for the previous calendar year (1 January to 31 December) must be filed by 31 May. The payment of the tax due must be made by the same date. An extension of up to 2 months (until 31 July) is available for the bookkeeping businesses.
• Tax rates — 6% to 45%: The global income tax (종합소득세) uses the progressive rates for 2026: KRW 0–14,000,000 — 6%; KRW 14,000,001–50,000,000 — 15%; KRW 50,000,001–88,000,000 — 24%; KRW 88,000,001–150,000,000 — 35%; KRW 150,000,001–500,000,000 — 38%; KRW 500,000,001–1,000,000,000 — 42%; over KRW 1,000,000,000 — 45%. The local income tax (지방소득세) is an additional 10% of the income tax.
• Foreign income reporting: The Korean residents must include the foreign-source income (the overseas employment income, the foreign business income, the foreign rental income, and the foreign investment income) in the global income tax return. The foreign tax credit (외국납부세액공제) may be claimed for the taxes paid abroad.

For example: a self-employed consultant with a net income of KRW 80,000,000 in 2026 pays the income tax of approximately KRW 10,814,000 + the local income tax of KRW 1,081,400 = total KRW 11,895,400.

E-Filing — 홈택스 (Hometax)

• Hometax — 홈택스 (www.hometax.go.kr): The National Tax Service (NTS) provides the Hometax online portal for the tax filing, the payment, and the document issuance. The system supports the Korean and the English interfaces. The English version is available at the same URL with limited functionality.
• E-filing steps: (1) Log in with the digital certificate (공인인증서) — the certificate issued by the registered certification authority (e.g., the banks, the telecom companies). (2) Select the "Year-End Settlement" or the "Global Income Tax Return" menu. (3) Download the pre-filled data (the income data, the expense data, the tax credit data). (4) Review and adjust the entries. (5) Submit the return and pay the tax (or apply for the refund).
• Authentication methods: The digital certificate (공동인증서 — formerly the 공인인증서), the simple authentication (간편인증 — the fingerprint or the face recognition through the mobile app), and the financial certificate (금융인증서).
• Mobile app — 손택스: The NTS also provides the Hometax mobile app called "손택스" (the "Hometax" app) for the iOS and the Android. The app allows the simplified tax filing, the tax payment, and the tax document issuance from the smartphone.

For example: a self-employed taxpayer logs into the Hometax system using the digital certificate, downloads the pre-filled sales data (from the VAT returns and the tax invoices), adds the deductible expenses, and submits the global income tax return — all within 30 minutes.

Penalties and Late Filing

• Late filing penalty: 0.8% of the unpaid tax for each day of delay, up to a maximum of 36.5% per year (recently reduced from 40%).
• Underreporting penalty: 10% of the underreported tax (40% for the intentional underreporting).
• Non-filing penalty: 20% of the unpaid tax.
• Refund: If the withholding tax or the prepaid tax exceeds the final tax liability, the taxpayer may receive a refund. The NTS processes the refund within 2–4 weeks of the filing date.

For example: a taxpayer who underreports KRW 10,000,000 in income faces an underreporting penalty of 10% (KRW 1,000,000) plus the interest on the late payment.

FAQs

What is the difference between the year-end settlement (연말정산) and the global income tax return (종합소득세)?

The year-end settlement (연말정산) is for the salaried employees only. The employer calculates the annual tax liability and adjusts the monthly withholding. The employee does NOT need to file a separate return. The global income tax return (종합소득세 신고) is for the self-employed, the rental income earners, and the individuals with the complex income sources. The taxpayer must file the return by the end of May.

Can I file the Korean tax return in English?

Yes. The Hometax (홈택스) website has an English language interface. The English version supports the tax filing, the tax payment, and the document issuance. The tax return forms (the 종합소득세 신고서) are available in the English format. However, the deduction descriptions and the guidance are primarily in Korean. The foreign residents may also file through the local tax office (세무서) with the assistance of the tax accountant (세무사).

What happens if I miss the 31 May deadline?

The late filing penalty of 0.8% per day of delay applies. The NTS also imposes the non-filing penalty of 20% of the unpaid tax. If the tax is not paid by 31 May, the interest accrues at the annual rate of approximately 3.5–5% (the rate set by the NTS annually). The extension of up to 2 months (until 31 July) is available for the bookkeeping businesses, but the interest still accrues on the unpaid tax.