contents
10.  Non-Resident Income Taxation
a.  General
	(1)	A non-resident is liable to tax on income derived from sources within Korea. Two
		methods of taxation are applied: global taxation and separate taxation. Global taxation
		is applied to non-resident taxpayers who have a place of business in Korea or those
		with income from real estate located in Korea (excluding capital gains from the
		transfer of land or buildings). All domestic source income is subject to global
		taxation, except for severance pay, capital gains, and timber income, all of which are
		taxed in the same manner as they would be if earned by a resident. Withholding
		taxation is applied to each domestic item of income of non-residents who do not
		have a place of business in Korea and do not have income from real estate located
		in Korea.
	(2)	A non-resident's tax address is the domestic business place. In the case of a
		non-resident who has no domestic business place, its tax address will be the place
		where such income is derived.
b.  Income from Domestic Sources
	(1) Interest Income:
		Interest and discount on bonds or securities issued by the national government or
		local autonomous bodies and other profit from a trust or non-commercial loan as
		prescribed by the following subparagraph shall be regarded as a domestic source
		income. However, interest paid on funds borrowed directly by a Korean resident's
		permanent establishment (PE) in a foreign country or by a Korean corporation for its
		business outside Korea shall not be considered as domestic source income.
		-  interest paid by the national or local government, a resident, a domestic
			corporation of Korea, a foreign corporation's PE in Korea, or a non-resident's PE in
			Korea
		-  interest received from a foreign corporation or a non-resident, where a PE of the
			concerned party includes the interest paid in computing taxable income as
			deductible expenses related to its operation
	(2) Dividend Income:
		distributions of profits or surplus, and advance payment of dividends under the
		Korean Commercial Code without surplus or cumulative earnings received from a
		domestic corporation or other business entity
	(3) Real estate Income:
		income arising from the transfer of a lease, or any other interest from real estate
		located in Korea, including titles to the real estate, mining rights, mine lease-holding
		rights, or quarrying rights located in Korea, excluding income subject to capital gains
		tax
	(4) Lease income of vessels, aircraft, etc :
		income arising from the lease of vessels, aircraft, registered automobiles or heavy
		equipment to residents, domestic corporations, or the Korean places of business of
		non-residents and foreign corporations
	(5) Business income :
		income arising from performance of services in the following industries: livestock,
		forestry, hunting, fisheries, mining, quarrying, manufacturing, electricity/gas/water
		services, construction, warehousing, communications, real estate dealing, services,
		and professional services (excluding personal service income)
	(6) Personal service income :
		an amount receivables as payment for furnishing or having others utilize personal
		services such as:
		(a) services provided by actors, musicians, or other public entertainers,
		(b) services provided by professional athletes,
		(c) services provided by lawyers, certified public accountants, licensed tax
			accountants, certified architects, public surveyors, patent lawyers, and others in
			liberal professions, and
		(d) services rendered by persons having expert knowledge or special skills in
			science, technology, business management, or other fields involving the utilization of
			such knowledge or skills.
	(7) Capital gains :
		gains derived from the transfer of land and buildings located in Korea
	(8) Timber income :
		income arising from the sale of timber located in Korea
	(9) Wage and salary income including pension or severance pay :
		the amount received as payment for labor performed in Korea
	(10) Royalties, rents, or any other consideration of a similar nature receivable for the use
		of the following assets or technical information within Korea, or for the right to use
		such assets or technical information, and income arising from the transfer of said
		assets or technical information.
		(a)  Copyrights on academic or artistic works (including motion pictures), patent
			rights, trademark rights, designs, models, drawings, secret formulae or processes,
			films and tapes for radio and television broadcasting, and any other similar assets or
			rights
		(b) Industrial, commercial, or scientific knowledge, experience, or skill
		(c)	Industrial, commercial, or scientific machines, equipment, devices, and fixtures,
			and such other tools as transport equipment, etc.
	(11) Gains arising from the transfer of investment securities or shares invested in a
		domestic corporation or other securities issued by a domestic corporation or the
		domestic business place of a foreign corporation. However, gains arising from the
		transfer by a non-resident of domestically listed shares or corporate shares
		registered with the Korean Securities Dealers Association shall not be taxed, subject
		to the reciprocity principle.
	(12) Other income:
		(a)	Insurance money, compensation money, or compensation for damages received
			in connection with real estate or other assets located in Korea, or those related to
			businesses conducted in Korea
		(b)	Money, goods, or other economic benefits received as a prize from contests held
			in Korea
		(c) Income from sale of treasure found within Korea
		(d)	Income from the assignment within Korea of rights established by license,
			permission, or other similar disposition under the Korean law, or from the transfer
			of property located in Korea at the time of transfer, other than real estate
		(e)	Money or goods received as a prize in a lottery, drawing, or any other contest,
			including the purse payable to the buyer of a winning race ticket
		(f)	Income other than those described above, arising from a business operated in
			Korea or the provision of personal services in Korea; in addition, this
			subparagraph includes economic benefits received in connection with assets in
			Korea (Note that if the amount received from the redemption of bonds issued by
			the government or banks established under the laws of Korea in a foreign
			currency exceeds the face value of such bonds in foreign currency, the balance
			in value shall not be included under this section.)
c.  Domestic Business Place
	(1)	If a non-resident has a fixed place of business in Korea of a type described in (a)
		through (e) below, he or she is deemed to have a domestic place of business.
		(a)	A branch or any other business office
		(b)	A store or any other fixed sales place
		(c)	A workshop, factory, or warehouse
		(d)	A building site, a location of construction, assembly or installation work, or a
			place for providing supervision of such work, any of which exists for more than 6
			months
		(e)	A place for providing service through an employee for a period exceeding 6
			months in aggregate out of any 12 consecutive month period
	(2)	The domestic places of business prescribed in the preceding paragraph do not
		include the following:
		(a)	a fixed place used by a non-resident only for the purchase of assets,
		(b)	a fixed place used by a non-resident only for storage or custody of assets for
			non-business purposes,
		(c)	a fixed place used by a non-resident for advertisement, public relations,
			collection or furnishing of information, market survey, or other activities of a
			preparatory or auxiliary nature for a business operation, or
		(d)	a fixed place used by a non-resident only for the purpose of having other
			persons process property of the non-resident; e.g., a foreign person might
			provide raw materials, title to which remains with the foreign person, into Korea to
			be assembled or processed into products for sale in the foreign person's home
			country; this activity would not give rise to a place of business in Korea.
	(3)	If a non-resident having no fixed place in Korea carries on a business through a
		person in Korea who is authorized to conclude and regularly does conclude
		contracts on the non-resident's behalf, such non-resident is deemed to have a
		place of business in Korea. In addition, a non-resident having no fixed place in
		Korea who carries on a business in Korea through any of the following persons is
		also deemed to have a business place in Korea.
		(a)	A person who regularly takes custody of goods delivered to Korea and delivers
			them to customers upon receipt of orders
		(b)	A person who regularly takes orders, carries on consultations, or conducts other
			important activities specifically for such non-resident
		(c)	A person who collects insurance premiums or insures risks located in Korea on
			behalf of such non-resident
d.  Tax withholding on Non-residents
	(1)	Unless otherwise provided in an applicable tax treaty, persons paying an amount of
		income from domestic sources to non-residents (excluding non-residents having
		real estate income or timber income) not attributable to a domestic business place,
		shall withhold as income tax at source of the income the applicable amount
		enumerated below. The tax withheld must be paid to the government by the 10th day
		of the following month in which such tax was withheld.
		(a)	Lease income of vessels, aircraft, etc., and business income: 2% of the amount payable
		(b)	Personal service income: 20% of the amount payable
		(c)	Interest income, dividend income, royalty, and other income: 25% of the amount
			payable
		(d)	Gains from the transfer of securities or shares: 10% of the amount payable
			However, if the purchase price of the securities or shares can be readily
			confirmed, the amount of tax withheld at source is the lesser of 10% of the amount
			payable or 25% of the gain on such a sale. If the securities or shares are
			transferred to a non-resident through a securities company, the securities
			company must withhold the income tax and pay it to the government at the tax
			office with jurisdiction over the domestic corporation (or the domestic business
			place of the foreign corporation) that issued the securities or shares.
		(e)	If a non-resident transfers securities of the same issue with different acquisition
			costs through a securities company, the company shall compute the acquisition
			value of the securities sold by using the moving average method.
	(2)	If a non-resident engages in a construction, installation, assembly project, or
		performs supervisory services related thereto on a short-term basis in Korea, the
		Korean resident paying for such services shall withhold income tax at source.
		However, if such non-resident registers its permanent establishment with the
		appropriate tax office, the payer will not be required to withhold and pay the tax.
	(3)	If a resident of Korea pays a non-resident who is engaged in the operation of
		vessels or aircraft in international transportation and who is not deemed to have a
		place of business in Korea, the resident shall withhold tax on the Korean-source
		portion of the amount paid.
	(4)	If a person subject to tax withholding fails to withhold and pay tax as required on time,
		a penalty equivalent to 10% of the amount of tax not paid shall be imposed on that
		person.