Question 1

How are penalties on late withholding tax returns calculated?

Accepted Answer

1. There is no filing penalty, but there is a payment delay penalty
2. Unpaid tax x 3% + (underpaid/unpaid tax x 2.2/10,000 x days overdue) <= 50%
3. NTS calculator is available for withholding tax penalties

Question 2

Who is eligible to apply for semi-annual withholding tax payment?

Accepted Answer

1. Corporations or sole proprietors whose average number of regular employees was 20 or fewer during the previous tax period
2. If the business only pays business income (no wage earners), it can apply as there are no wage-income recipients
3. The number of regular employees is calculated as the 12-month average of month-end headcounts (excluding daily workers)

Question 3

When is the deadline for filing a simplified payment statement?

Accepted Answer

1. Wage income: by the end of the month following the last month of the half-year in which the payment falls
2. Business income of a resident: by the end of the month following the month of payment
3. Other income of a resident: by the end of the month following the month of payment

Question 4

How do I file labor cost reports?

Accepted Answer

1. Daily worker (short-term)
   (Daily wage - KRW 150,000) x 6% x (1 - 55%) + local tax 10%
2. Full-time employee (continuing employment)
   Apply the wage-income tax rate (monthly withholding filing)
3. Freelancer (service provision without an employment relationship)
   Withhold 3.3% of the payment

Frequently Asked Questions (FAQ)

Frequently Asked Questions