Taxes on Residents of South Korea

Information on the community, vehicle, purchase, property and local municipal taxes to be paid by residents in South Korea...

Residents in Korea are also subject to the following local taxes.

Acquisition Tax

Acquisition tax is liable on the purchase or inheritance of the following:

  • Real estate
  • Vehicles, aircraft and boats
  • Heavy equipment
  • Trees
  • Golf, health club and condominium memberships

The tax rate is two percent on the purchase price or the annual instalment, if a property is being paid for this way. In the case of some luxury goods, for example the purchase of a golf course or luxury villa, the tax rate is ten percent of the purchase price. The tax must be paid within 30 days of the acquisition being made, and a penalty is charged for late payment. Exemptions include buying a car with an engine smaller than 1000 cc for personal use and buying property after a divorce.

Inhabitant Tax

Residents in a city or anyone who has a business in a city are liable for this tax. The rate is determined on a per-capita basis by local governments. A tax return need not be completed: the local government or authority imposing the tax serves notice and collects it.

Property Tax

Property tax is paid on the ownership of land, buildings, houses, vessels and aircraft. The amount payable depends on what the land or building is being used for and the type of house. This tax is assessed annually on 1 June.

Automobile Tax

Automobile tax must be paid by anyone owning a vehicle. There are two taxation periods:

  1. January to June: payable between 16 and 30 June.
  2. July to December: payable between 16 and 31 December.

There are two tax rates: one for vehicles for business use and one for vehicles for personal use. Within these two rates the tax owed depends on the engine size of the vehicle. A higher tax is levied on larger engines. There are also separate tax rates for trucks, special cars and cars with no more than three wheels.

Urban Planning Tax

Urban planning tax must be paid by anyone who owns land or houses in the area designated by a city's mayor or commissioner for assessment of city planning tax. The tax owed is dependent on the value of the house or land. The standard rate for this tax is 0.15 percent, but a mayor or commissioner may charge more, up to a maximum of 0.23 percent. The rules governing the payment of this tax are determined in each city by the mayor or commissioner.

Community Facility Tax

This tax must be paid by anyone who benefits from garbage disposal systems, fire services, sewage facilities and other community services. The tax rate is determined by the value of the land or house, and payment is determined locally by city authorities.

Local Education Tax

Anyone who is liable for the following taxes must also pay local education tax, which is levied at the same time:

  • Inhabitant tax
  • Property tax
  • Automobile tax

The amount payable is between 20 and 30 percent of the amount paid for the tax listed above.

Local Income Tax

Anyone who pays income tax is also liable for local income tax. The amount payable is currently ten percent of the income tax paid. This tax should be paid to the mayor or county chief who governs the city or county lived in. It should be paid within a month of income tax returns (for income or capital gains) being filed. Penalties are imposed if the tax is not paid by the due date.