Article 2 (Tax Liability),
Article 3 (Scope of Taxable Income),
Article 4 (Classification of Income),
Income Tax Act, as last amended by Act No. 14474, Dec. 27, 2016

All employees are subject to pay income tax.


*Income Tax Act

Article 2 (Tax Liability)

(1) Any of the following individuals shall be liable to pay income tax on his/her income under this Act:

1. A resident;

2. Any nonresident individual who has income from domestic sources.

(2) Any of the following persons shall be liable to pay withholding income tax under this Act:

1. A resident;

2. A nonresident;

3. A domestic corporation;

4. A branch or business office in the Republic of Korea (including a local office and other offices corresponding thereto; hereinafter the same shall apply) of a foreign corporation;

5. Other withholding agents prescribed by this Act.

(3) This Act shall apply to non-juristic organizations, other than organizations deemed corporations under Article 13 (4) of the Framework Act on National Taxes (hereafter referred to as "organizations deemed corporations"), among non-juristic organizations under Article 13 (1) of the same Act, considering them as a resident where they have a principal office or substantive place of business management within the Republic of Korea as prescribed by Presidential Decree or as a nonresident in other cases.

[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]

Article 3 (Scope of Taxable Income)

(1) A resident shall be imposed tax on all income prescribed by this Act: Provided, That as for a foreign resident who has had his/her domicile or place of residence for not more than five years in total from ten years before the end of the relevant taxable period, a tax shall be imposed only on his/her income paid in or remitted to the Republic of Korea, in cases of taxable income from foreign sources.

(2) A nonresident shall be imposed tax on Korea-source income only under Article 119.

(3) When applying paragraphs (1) and (2), a partner under subparagraph 2 of Article 100-14 of the Restriction of Special Taxation Act shall be imposed tax on the income distributed pursuant to Article 100-18 (1) of the same Act and income generated in excess of the value of his/her stake on the distribution date of the market price of assets distributed pursuant to Article 100-22 (1) of the same Act.

[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]

Article 4 (Classification of Income)

(1) Income of a resident shall be classified as follows:

1. Global income: Sum of each of the following incomes after deducting income under subparagraphs 2 and 3 from all the taxable incomes under this Act:

(a) Interest income;

(b) Dividend income;

(c) Business income;

(d) Wage and salary income;

(e) Pension income;

(f) Other income;

2. Retirement income;

3. Capital gains.

(2) When classifying income pursuant to paragraph (1), profits from trust (excluding special accounts of an insurance company that runs a collective investment business concurrently under Article 251 of the Financial Investment Services and Capital Markets Act), other than a collective investment scheme under Article 17 (1) 5, shall be classified according to the details of income generated from the property rights transferred to a trustee pursuant to Article 2 of the Trust Act or disposed of otherwise.

(3) Income of a nonresident shall be classified pursuant to Article 119.

[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]