Resident or Non-Resident: Korean Tax Status

For a foreign national, the first thing to settle about Korean tax is whether you are a resident or a non-resident. A resident pays Korean income tax on income from everywhere; a non-resident pays it only on income that arises in Korea. Whether the interest on your savings back home or the rent on a house there has to be reported in Korea comes down to this one classification.

Enter the days you spent in Korea this year, any days that carried over unbroken from last year, and your job and family circumstances, and the calculator tells you which you are and which provision decides it. If you are a resident, it also checks how long you have lived in Korea within the last 10 years and tells you whether the relief that taxes only remitted foreign income applies.

Foreigners who have started working in Korea, people who split the year between Korea and home, and people whose family lives in Korea while they travel abroad for work. Ahead of the year-end settlement or the May comprehensive return, settling the classification first tells you what has to go on the return.

It is also for anyone preparing to leave. Whether you were a resident in the year of departure changes what that year's income is taxed on, and knowing when you become a non-resident lets you line things up with your home-country filing. If your country has a tax treaty with Korea and both countries treat you as resident, the treaty's tie-breaker order takes over, so bear in mind that this calculator applies Korean domestic law only.

소득세법 제1조의2제1항제1호 defines a resident as an individual who has a domicile in Korea or has had a place of residence here for 183 days or more. That gives two routes. The first is domicile, which ignores day counts. 시행령 제2조제3항 deems you to have a domicile if you hold a job that normally requires living in Korea for 183 days or more, or if family members who share your livelihood live in Korea and your job and assets suggest you will keep living here. Under this route you can be a resident without completing a single day.

The second route is day count. 시행령 제4조제1항 counts the period of residence from the day after arrival to the day of departure, and paragraph 3 of the same article treats 183 days or more in one tax year, or 183 days or more running continuously across two tax years, as meeting the test. The calculator checks the job and family conditions first, then this year's days, then this year's days plus the unbroken run from last year, against 183. Any one of them makes you a resident.

Becoming a resident does not mean reporting everything from home. The proviso to 소득세법 제3조제1항 says that a foreign resident whose total period of domicile or residence in Korea within the 10 years before the end of the tax year is 5 years or less is taxed on foreign-source income only to the extent it is paid in Korea or remitted to Korea. Most foreigners who arrived recently qualify.

Take someone who spent 200 days in Korea this year, with no carry-over from last year, no job requiring long-term residence, no family here, and 2 years of residence in Korea within the last 10. 200 days is 183 or more, so they are a resident on the strength of one tax year's residence. At the same time, 2 years is within the 5-year limit, so the relief applies and only foreign income remitted to Korea needs to be reported.

What if they had only 100 days this year but arrived late last year and 90 days ran unbroken into this one? This year alone falls short of 183, but counted across the two tax years it is 190 days, so they are a resident, again on the day count, and the relief works out the same. By contrast, 100 days this year with no carry-over and neither the job nor the family condition makes them a non-resident, taxed only on Korean-source income.

The most common is believing that staying under 183 days keeps you a non-resident. With family in Korea or a job that requires long-term residence, you are a resident regardless of the count. The second is counting days one calendar year at a time. A stay that runs across the year boundary is added together, so someone who arrived in December can be a resident by the following summer.

The third is counting the day of arrival. The rule starts the count on the following day, which takes one day off. The fourth is panicking that residency means reporting all home-country income. If your time in Korea is 5 years or less within the last 10, only foreign income brought into Korea is reported. Finally, this is a domestic-law test; if your home country also treats you as resident, the treaty tie-breaker decides.