By Kim Seon Ah
Video = National Tax Service's official YouTube channel 

A new year also means time to calculate income tax owed by those who earned wage and salary income in the previous year.

The National Tax Service (NTS) on Jan. 3 said expats who earned such income last year regardless of nationality, length of stay or earnings amount should file the settlement before next month's salary is paid.

The settlement calculates the difference between taxes owed and income tax paid from one's monthly salary for a year. Foreign workers should submit the income tax deduction report and evidential documents to the withholding agent (employer) to finalize foreign employee income tax for a year, which will lead to receiving a refund or paying any outstanding tax. In the event of a refund, the amount is nicknamed "13th month's salary."

A 19% flat tax and extended income reduction or exemption for foreign engineers are the most noticeable changes to this year's settlements for expats.

Application of the 19% flat tax was extended from five years to 20, meaning a foreign worker can choose the general tax or flat tax for 20 years from the day they start working in Korea.

The tax reduction and exemption period for foreign engineers was doubled from five years to 10. Foreign engineers can qualify for an income tax break of 50% for 10 years if they supply technology under an engineering technology adoption contract and work at a domestically affiliated think tank after working at foreign ones for at least five years with a bachelor's degree or higher in science and engineering.

Foreign workers who live in Korea for 183 days or more are subject to the same categories and schedule for general settlement as their domestic counterparts. They are ineligible, however, for deductions for long-term savings for housing as they lack the qualifications for head of a household under the Resident Registration Act.

Non-residents who stay for under 183 days qualify for only certain deductions such as basic and those for pension and insurance premiums. They cannot get most income and tax deductions including those for medical and educational expenses.

The NTS offers an English-language call center (1588-0560) and information guide and manuals in English, Chinese and Vietnamese to help expats perform year-end tax settlement. Instructional videos are also available on its YouTube channel (https://www.youtube.com/user/ntskorea).

sofiakim218@korea.kr