The Korean Ministry of Strategy and Finance released amendments to the tax law on 13 February 2018. Key changes are following:
- The withholding tax rate will increase from 17% to 19% on the amount of compensation paid to hiring foreign entities. Foreign financial accounts reporting requirement has tightened, with a reduction in the reporting threshold amount from KRW 1b (U$920,000) to KRW 500m (U$460,000).
- The obligation to submit documents on overseas corporations/subsidiaries, real estates, etc. has been removed for foreigners who are non-permanent residents. The administrative fines imposed for failure to comply with this obligation have increased to a maximum of KRW 50m (U$46,000), and changed to impose penalties for each instance of non-compliance for both residents and domestic entities.
- The threshold on the annual sum amount of compensation paid by user Korean entities reduced to KRW 2b.
