Income Tax · Corporate Tax · Withholding · Books

This is general information, not legal or tax advice. Rules change often, so verify with the official source or a licensed tax accountant (semusa) or lawyer before acting.

If VAT is "tax on transactions," income tax and corporate tax are tax on the profit you kept over a year. Books and evidence are how you prove that profit.

Global Income Tax (Sole Proprietors)

• Income for one year (January 1 to December 31) is combined and filed and paid in May of the next year. The deadline is May 31.
• Businesses that submit a sincere-filing confirmation (seongsil singo hwagin) get one more month, until June 30.
• Rates are progressive from 6% to 45% by tax base bracket (NTS global income tax rate table). Local income tax is added separately.
• Interim prepayment: part of the income tax for the first half (January 1 to June 30) is billed and paid in November. If the estimated interim amount is below KRW 500,000 nothing is payable, but you must file the estimate to cancel the notice.
• Withholding by foreign platforms: overseas app stores and payment platforms may withhold local tax from payouts (and may ask for forms such as W-8BEN to apply a tax treaty). Keep the settlement statements or certificates showing the withholding, and claim it as a foreign tax credit in the global income tax return (Income Tax Act Article 57). The credit is capped (computed income tax × foreign-source income ÷ global income), and any excess carries forward for 10 years. Check the withholding rate per country in the tax treaty and the platform's guide (needs verification).

Who Needs a Sincere-Filing Confirmation

A sole proprietor whose revenue for the tax period reaches the industry threshold must file a sincere-filing confirmation checked by a tax accountant or similar with the global income tax return (Income Tax Act Article 70-2, Enforcement Decree Article 133). Per the NTS sincere-filing confirmation guide (as of filings for the 2026 tax year):

• Software development and supply usually falls under information and communications (KRW 750 million), but if contract development is registered under a professional, scientific and technical services code the KRW 500 million threshold may apply, so check your registered industry code.
• Filing the confirmation gives a tax credit of 60% of the cost spent directly on it (Restriction of Special Taxation Act Article 126-6). The credit has a cap, so check the amount in the article.
• If an under-report leads to a correction, the confirmation cost credit is denied for the following 3 tax years (NTS guide).

Corporate Tax

• File within 3 months from the end of the month in which the fiscal year ends (Corporate Tax Act Article 60). For December year-end corporations, March 31 of the next year.
• Rates (fiscal years starting on or after 2026-01-01, NTS guide): tax base up to KRW 200 million 10%, over 200 million up to 20 billion 20%, over 20 billion up to 300 billion 22%, over 300 billion 25%.
• Interim prepayment: a corporation whose fiscal year exceeds 6 months pays interim tax for the first 6 months within 2 months after that period (Corporate Tax Act Article 63). The first fiscal year of a newly founded corporation is excluded.

Withholding and Payment Statements

Withholding (woncheon jingsu) means deducting tax in advance when you pay someone and paying it on their behalf.

• Pay withheld tax by the 10th of the month after the month of withholding.
• If you meet conditions such as regular headcount and are approved, semiannual payment (10th of the month after the half-year) is possible.
• Missing the payment statement deadline incurs penalty tax of 1% of the unsubmitted amount (0.25% for daily wage income and simplified statements). Submitting within 1 month after the deadline reduces it (NTS guide).
• Monthly simplified statements for wage income were deferred once and start on 2027-01-01. The NTS says that during 2027 (through 2028 for small businesses), filing by the old half-year deadline waives the non-filing penalty.

flowchart LR
    P[Pay a freelancer] --> W[Withhold 3.3%]
    W --> T[Pay withholding tax by the 10th of next month]
    W --> S[Submit simplified payment statement]
    T --> R[Annual settlement and books]
    S --> R

Books: Simple Bookkeeping vs Double-Entry

The bookkeeping duty is set by revenue by industry in the previous tax period. New businesses are in principle simple-bookkeeping businesses.

• Software development and supply usually falls under information and communication, but the registered industry code decides, so check on Hometax.
• Simple-bookkeeping businesses may still keep double-entry books.
• Small businesses with previous-period revenue below KRW 48 million, among others, are exempt from the no-bookkeeping penalty.
• Without books you file on an estimated (expense-ratio) basis, and real expenses are hard to recognize even when they are large.

Expenses

• To have a cost recognized, the rule is to obtain qualified evidence (tax invoice, invoice, credit card slip, cash receipt).
• If you pay a business and do not receive qualified evidence, a 2% penalty on the unreceived amount can apply (check the NTS guide for the threshold amount and exceptions).
• On the other side, when you receive revenue, some industries have cash receipt issuing and merchant duties (mandatory industries such as e-commerce retail must issue for cash transactions of KRW 100,000 or more even without a request, with a 20% penalty on unissued amounts). See choosing an industry code in document 02 for the criteria.

Bad example:

We mixed personal and business cards and hunted for a year of receipts in May.

Good example:

We used only the business card, gathered overseas invoices into a folder at each month-end, and noted the purpose.

Business Passenger Cars (double-entry bookkeepers)

A double-entry bookkeeper who deducts business passenger car costs (depreciation, lease or rental fees, fuel, insurance, repairs, vehicle tax, tolls, etc.) follows Income Tax Act Article 33-2 and Enforcement Decree Article 78-3.

• Simplified bookkeepers are outside this special rule, but they must still prove business use.

Monthly Routine

Start of month: download last month's settlement reports (domestic / overseas split)
10th: pay withholding tax (if any)
End of month: submit simplified payment statements (business income, and wage income from 2027)
End of month: file overseas invoices and card slips
End of quarter: check VAT preliminary notices and returns

References

• NTS - Global income tax filing and payment deadlines (accessed 2026-09-28)
• NTS - Sincere filing confirmation system (accessed 2026-09-28)
• Korea Law Information Center - Restriction of Special Taxation Act Article 126-6, credit for sincere-filing confirmation costs (accessed 2026-09-28)
• Korea Law Information Center - Income Tax Act Enforcement Decree Article 78-3, business passenger car costs (accessed 2026-09-28)
• Korea Law Information Center - Income Tax Act Article 35, non-deductible business promotion expenses (accessed 2026-09-28)
• Korea Law Information Center - Income Tax Act Article 57, foreign tax credit (accessed 2026-09-28)
• NTS - Duty to issue cash receipts (accessed 2026-09-28)
• NTS - Tax treatment of business passenger cars (PDF) (accessed 2026-09-28)
• NTS - Notice deferring monthly simplified payment statements for regular employees (accessed 2026-09-28)
• NTS - Global income tax rates (accessed 2026-09-28)
• NTS - Global income tax interim prepayment (accessed 2026-09-28)
• NTS - Corporate tax filing and payment deadlines (accessed 2026-09-28)
• NTS - Corporate tax rates (2026 onward) (accessed 2026-09-28)
• NTS - Corporate tax interim prepayment (accessed 2026-09-28)
• NTS - Withholding tax filing and payment deadlines (accessed 2026-09-28)
• NTS - Submitting payment statements (accessed 2026-09-28)
• NTS - Simplified payment statement (wage income) deadline cases (accessed 2026-09-28)
• NTS - Simple bookkeeping guide (accessed 2026-09-28)
• NTS - Bookkeeping duty and expense-ratio criteria (accessed 2026-09-28)