Taxed Twice? How Foreigners in Korea Can Avoid Double Taxation

1. ·Income Tax Act Article 42 ①: When Korea has a tax treaty with another country to prevent double taxation, and the competent authorities of both countries reach a Mutual Agreement (MAP) on a transaction between a Korean resident and a non-resident or foreign corporation abroad, the head of the competent tax office or regional tax office may adjust the resident's taxable income for the relevant tax period accordingly.
2. ·Income Tax Act Article 42 ②: Matters regarding a resident's application for income adjustment and other necessary adjustment procedures are prescribed by Presidential Decree.
3. ·Framework Act on National Taxes Article 26-2 ①: The general statute of limitations for tax assessment is 5 years from the date on which tax can be imposed.
4. ·Framework Act on National Taxes Article 26-2 ①(proviso): For offshore transactions (국제거래 and transactions involving assets or services located/provided abroad between resident parties), the statute of limitations is extended to 7 years.
5. ·Framework Act on National Taxes Article 26-2 ②-1: If the taxpayer fails to file a tax return by the legal deadline, a separate (potentially different) statute of limitations period applies — filing on time is critical to protecting your rights.

1. ·Korea must have a tax treaty (조세조약) with your home country that includes a Mutual Agreement Procedure (MAP) provision
2. ·The same income must actually be taxed in both countries (double taxation must have occurred or be imminent)
3. ·You are a resident (거주자) in Korea for tax purposes, or the income is sourced in Korea
4. ·The transaction involves a non-resident or foreign corporation abroad (for Article 42 adjustment)
5. ·You must have filed, or be eligible to file, a tax return within the legal deadline to maintain full statutory protections

1. 1Step 1: Confirm whether Korea has a tax treaty with your home country (check the NTS website: www.nts.go.kr or call NTS helpline 126)
2. 2Step 2: Gather evidence of double taxation — tax assessments or payment receipts from both countries for the same income
3. 3Step 3: File your Korean income tax return by the legal deadline if you have not already done so (protects your rights under the statute of limitations)
4. 4Step 4: Submit a formal request (신청서) for income adjustment or MAP to your competent local tax office (세무서) or regional tax office (지방국세청), citing Income Tax Act Article 42
5. 5Step 5: The competent authorities of both countries will negotiate; the Korean tax office may adjust your taxable income based on the outcome per Article 42 ①
6. 6Step 6: Consult a licensed tax accountant (세무사) for case-specific guidance, especially for complex international transactions

National Tax Service (국세청) — local tax office (세무서) or Regional Tax Office (지방국세청); NTS International Taxation Division for treaty-related matters

1. ·Not checking whether a tax treaty exists between Korea and your home country before assuming you have a remedy — without a treaty, the MAP route under Article 42 may not be available
2. ·Missing the legal tax filing deadline in Korea, which can affect the statute of limitations protections under Framework Act on National Taxes Article 26-2
3. ·Assuming that paying tax abroad automatically exempts you from Korean tax — you must formally apply for adjustment through the proper procedure
4. ·Confusing the general 5-year statute of limitations with the 7-year period for international/offshore transactions — misidentifying your transaction type can affect your timeline
5. ·Trying to resolve the issue informally without submitting a written application, which is required under Income Tax Act Article 42 ②