【Feb. 2015】
☞ The following tax information is translated from Korean for foreign-invested companies, and is not legally binding.
(Q) How do I claim for a refund when my year-end tax settlement tells me that I am applicable for the refund?
(A) When a refund occurs, your employer will directly refund the difference to you. No application for a claim is required.
(Q) I retired from work during the attributable taxation period and claimed for a refund through year-end tax settlement. However, my company keeps delaying the payment of the refund. Can I get the refund from a district tax office instead of through the company?
(A) The refund occurred as a result of the year-end tax settlement for wage and salary income earners is to be paid by the withholding agent(employer).
District tax office |
⇔ (Adjustment/refund) or |
Withholding agent
(Employer) |
⇦ (Additional payment)
⇨ (Refund) |
Wage & salary income earners |
⇦ (Claim for a refund)
⇨ (Refund) |
If a refund occurs as a result of the year-end tax settlement and the withholding agent keeps delaying the payment of the refund, then the worker has the right to claim for a refund from the withholding agent. That is, the worker can claim for the refund in the same way as claiming overdue wage. Regarding wage and salary, retirement pay, and dismissal, you can contact the worker's call center at the Ministry of Employment and Labor (☎1350).
(Q) Is there frequent errors in conducting year-end tax settlement?
(A) Frequent Errors in Conducting Year-end Tax Settlement
▣ Deduction for the dependents whose annual income exceeds ₩1,000,000
- The dependent whose total annual income including wage&salary income, capital gain, business income and retirement income exceeds ₩1,000,000 is not entitled to basic deduction and special deduction.
* The dependent, as a wage&salary income earner, whose total annual salary (excluding non-taxable income) exceeds ₩5,000,000 is not entitled to basic deduction.
☞Total salary (₩5,000,000) - Deduction for wage&salary income (₩4,000,000) = Wage&salary income (₩1,000,000)
▣ Duplicated deduction for dependents & Deduction for the dead
- A working couple makes a duplicate application of basic deduction for a child.
- Basic deduction is asked to be allowed for the dead or emigrant dependents.
▣ Excessive tax credit for educational expenses
- Deduction for a lineal descendant's or a sibling's educational expenses of a graduate school at home or abroad
- Deduction for the educational expenses including a scholarship which is not subject to deduction
▣ Excessive tax credit for medical expenses
- Costs for nursing or postnatal care center are deducted as one of the medical expenses.
- The medical expenses paid by insurance (ex. Accident insurance, etc.) are deducted.
▣ Excessive deduction for the amount spent on credit cards
- Deduction for the credit card usage including the amount spent on the dependents (siblings)' cards, etc. which is not allowed to be deducted
- A working couple makes a duplicate application for deduction on the amount spent on their child's credit cards, etc.
- Deduction for the amount spent during the period when labour was not provided
☞ For more information, please contact the International Tax Resource Management Office of the National Tax Service (82-44-204-2884).
