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THE INVESTOR] South Korean government is planning to change the preferential income tax for foreign nationals working here, local media reported on July 18.
According to reports, the Ministry of Strategy and Finance reviewing three possible measures in altering the special income tax rate applied to foreign nationals who work for companies specified by the presidential decree. At present, foreign nationals working at relevant companies are taxed at fixed rate of 17 percent regardless of income.
The Finance Ministry plans to extend the special income tax rate beyond the original expiration date of Dec. 31, but the measure will be altered.
Alternatives under consideration include raising the 17 percent fixed rate, maintaining the fixed rate but applying different rates above a specified income, and changing the criteria required to receive preferential taxation.
The special tax rate for foreign nationals was introduced to attract qualified individuals, and to attract foreign nationals choosing to be located in Hong Kong and other regions with lower tax rates.
However, with the income tax rate for Koreans ranging from 6 percent to 38 percent, the measure has been criticized for being discriminatory toward Koreans.
By Choi He-suk (
cheesuk@heraldcorp.com)
