TITLE : Changes in Korean Visa,Taxation and Labor
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■ Changes in Korean Visa,Taxation and Labor
▶ Visa
Reason for change (Enforced date: Jul. 26, 2021)
To diversify the system of issuing a technology start-up (D-8-4) visa to attract more foreign talentsstarting a business overseas and promoting the employment of Koreans by supporting incorporation
Before
A foreigner participating in the K-Startup Grand Challenge project andrecommended by the Minister of SMEs and Start-ups is granted change totechnology start-up (D-8-4) visa without applying the score system.
After
Addition of eligibility for exemption from the score system
- A foreigner participating in the K-Startup Grand Challenge project and recommended by the Minister of SMEs and Start-ups is granted change to technology start-up (D-8-4) visa without applying the score system.
- A beneficiary* of a government start-up support project within the past 2 years who received a recommendation of the Minister of SMEs and Start-ups is granted change to technology start-up (D-8-4) visa without applying the score system.
* The beneficiary should have received grants of KRW 30 million or more from the government
New |
Preferential treatment of intellectual property rights holders from OECDcountries who are subject to the score system The expertise of property rights holders from OECD countries are recognized and they areexempted from OASIS-2 (advanced course on intellectual property rights) education (score of 20points recognized) |
▶ Taxation
Reduction of corporate tax rate
Corporate tax rate is reduced by 1%p for each tax base bracket
Tax base | Before Tax rate | After Tax rate |
Not over KRW 200 mil. | 10% | 9% |
Over KRW 200 mil. – Not over KRW 20 bil. | 20% | 19% |
Over KRW 20 bil. – Not over KRW 300 bil. | 22% | 21% |
Over KRW 300 bil. | 25% | 24% |
Strengthened tax support for foreign employees
- (Application of flat tax rate for foreign employees*)
The period of application of special taxation is extended from five years to 20 years starting from the date offirst providing service in Korea.*Under the special taxation, foreign employees can choose to have the flat tax rate (19%, non-taxation not applicable)applied instead of the global income tax rate (6-45%). - Reduction/exemption of income tax for foreign engineers*)
The period of application of reduction/exemption of income tax (50%) is extended from five years to 10 yearsin order to promote technology development by foreign experts.*Income tax is reduced by 50% for five years for foreign engineers providing engineering technology, etc.
Establishment of tax credit for integrated employment
To promote corporate employment, tax credits including tax credit for employment increase, tax creditfor social security premium, tax credit for career-interrupted women are merged into ‘tax credit forintegrated employment’.
Before | After | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Introduction of tax credit for integrated employment Basic deduction
*Age of youth employees: 15 to 34
Additional deduction :
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▶ Labor
Minimum wage raised
Before | After |
KRW 9,160 per hour, KRW 1,914,440 per month * Based on 209 hours / applied in 2022 |
KRW 9,620 per hour, KRW 2,010,580 per month * Based on 209 hours / applied in 2023 |