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Subject Mastering South Korea's Tax Evolution: Unveiling Key Reforms for Foreign Workers & Condensed Submission Deadlines [Aug. 2023 #3]

🚀 With great anticipation, I unveil the third and final installment of my series on the Korean government's 2024 tax reform proposal – your premier source for cutting-edge financial insights! 📊 This release encompasses two pivotal updates that are reshaping taxation, with a dedicated focus on South Korea's progressive tax proposal:

📢 Part 1: Extension of Flat Rate Tax Regime for Foreign Workers 📢

Attention foreign expatriates and employees! Here's the noteworthy update you've been awaiting:

Eligible foreign workers are entitled to a flat 19% tax rate (20.9% including local income tax) on income earned in Korea for 20 years from the commencement of their work, given they begin before December 31, 2023.

The proposed tax reform extends this timeline by an additional five years until December 31, 2028. Important to note: No other income deductions, exemptions, or credits apply.

Notably, employer-provided housing benefits will be permanently excluded from the earned income of eligible foreign workers, enhancing the attractiveness of this special tax concession.

The existing income exclusion for housing benefits applies until December 31, 2023.

Impact: Cultivates a favorable tax environment for foreign workers, encouraging an influx of international talent and fostering steady economic growth.

📢 Part 2: Condensed Submission Deadlines for Master and Local Files 📢

Attention to those immersed in finance! A significant shift in submission timelines is underway:

Large taxpayers, get prepared to adapt. The window for submitting master files and local files, which was once a leisurely 12 months, has now been condensed to just six months.

The deadline for country-by-country reports remains stable, providing a reassuring sense of stability amidst these changes.

Impact: Enhanced efficiency and precision in documentation, empowering businesses to confidently navigate evolving regulatory landscapes.

Please note that while these details provide current insights, they are subject to potential changes during the Korean Congress review of the government's proposed tax law amendments.

Stay informed and engaged with these critical tax updates.

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