If you're moving to South Korea, here's how taxes work
From income tax to VAT, South Korea's tax system has several layers. This guide breaks down what matters most for expats in 2026.
Tax System Overview
| Tax Component | Rate / Details |
|---|---|
| Tax System Type | Progressive |
| Top Personal Income Tax Rate | 45% |
| Effective Rate on €90,000 | 10.6% |
| Net Monthly on €90,000 Gross | €5,962 |
| VAT (Standard Rate) | 10.0% |
| Special Expat Regime | Yes — other. Foreigner Employment Permit Point System: Simplified visa process, work permit validity extension |
| Tax Revenue (% of GDP) | 15.7% |
Income Tax in South Korea
South Korea operates a progressive income tax system, meaning higher earners pay a higher percentage on their income above certain thresholds. The top marginal rate is 45%.
What Does This Mean in Practice?
On a gross annual salary of €90,000, you would pay an effective tax rate of approximately 10.6%, resulting in a net monthly income of approximately €5,962. This accounts for income tax and mandatory social contributions.
For context, the average monthly salary in South Korea is approximately €2,436.
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VAT (Value Added Tax)
The standard VAT rate in South Korea is 10.0%. VAT is included in consumer prices and applies to most goods and services. Reduced rates typically apply to:
- Basic food items and groceries
- Medical supplies and pharmaceuticals
- Books and educational materials
- Public transport (in some cases)
Special Tax Regimes for Expats
Yes — other. Foreigner Employment Permit Point System: Simplified visa process, work permit validity extension
If eligible, these regimes can provide substantial savings during your initial years in South Korea. Always verify current requirements with a qualified tax professional, as rules change frequently.
Tax Filing Requirements
As a tax resident of South Korea, you are generally required to:
- Register with tax authorities upon establishing residence
- Obtain a tax identification number
- File an annual tax return (deadlines vary)
- Declare worldwide income if you are a tax resident
- Report foreign bank accounts if applicable
Double Taxation
South Korea has double taxation agreements (DTAs) with numerous countries. These treaties determine which country has the right to tax specific types of income and help prevent you from being taxed twice on the same income. Before moving, check whether a DTA exists between South Korea and your home country.
Tax Tips for Expats
- Hire a local tax adviser familiar with expat situations during your first year
- Keep records of all income, deductions, and tax payments from day one
- Understand residency rules: most countries consider you a tax resident after 183 days
- Check for exit tax: some countries impose tax on unrealised gains when you leave
- Social security contributions are often separate from income tax and can add 10-20% to your total burden
Additional Practical Information
Key Institutions and Services
Based on current expat reports, the following organisations and services are relevant for newcomers to South Korea:
- National Tax Service
- National Service Taxes Ministry
Additional Data Points
Recent reports and expat sources provide these additional figures for South Korea:
- A special tax regime applies to expatriates in South Korea. Their income is taxed at an overall rate of 20.9% made up of 19% income tax and 1.9% local income tax. Certain foreign nationals in South Korea can choose between the flat rate rate at 20.9% without any deductions or progressive rates between 6.6% and 44% after deductions.
- 0-12000000 KRW 6%
- 12-46000000 KRW 15%
- 46-88000000 KRW 24%
- 88-300000000 KRW 35%
- More than 300 million KRW 38% Good to know:
- If you are an expat living in South Korea, you might have questions regarding the country's taxation system. First of all, note that you will have to pay tax if you are a resident of South Korea for more than a year. Make sure to seek related information with the Korean taxation authorities before travelling to Korea.
- Residents of South Korea are taxed on their income, whether the income was earned in the country or abroad. Non-residents, on the other hand, are taxed on the income received in South Korea only. Moreover, income tax is deducted at source, and you must file a tax return at the end of each year.
- Over 20 billion KRW 22% Certain companies, such as farming and fishing cooperatives and investment companies, may be exempt from tax. However, you may be required to pay other forms of taxes such as urban planning tax, office tax, and more.
Additional data sourced from expat community reports. All information should be verified with official sources.
Frequently Asked Questions
What is the income tax rate in South Korea?
South Korea uses a progressive tax system. The top personal income tax rate is 45%. On a gross income of €90,000, the effective tax rate is approximately 10.6%, leaving a net monthly income of approximately €5,962.
Do I need to file a tax return in South Korea?
In most cases, yes. If you are employed in South Korea, your employer may withhold taxes, but you may still need to file an annual return, especially if you have additional income, deductions to claim, or foreign income. Filing deadlines vary — consult the local tax authority.
How does South Korea's tax compare to other countries?
With an effective rate of 10.6% on €90k income and a top rate of 45%, South Korea's tax burden is Moderate by European standards. The tax revenue as a share of GDP is 15.7%. Compare with other countries using our assessment tool.
Are there special tax regimes for expats in South Korea?
Yes — other. Foreigner Employment Permit Point System: Simplified visa process, work permit validity extension. Special tax regimes can significantly reduce your tax burden during the initial years of relocation. Consult a local tax adviser to determine your eligibility.
Are crypto earnings taxed in South Korea?
Cryptocurrency taxation in South Korea varies. Most countries treat crypto gains as capital gains or income depending on frequency of trading. Mining and staking rewards are typically taxable. Regulatory frameworks are evolving, so consult a specialist tax adviser.
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