With regard to the change in applying the flat tax rate, please refer to the following information for more explanation.

□ Change in the period of applying the flat tax rate (19%) for foreign workers (Article 18-2 of the Restriction of Special Taxation Act)

 - Date of enforcement: January 1, 2023

 - Subject concerned: income from 2023

 - Expand the application period for the flat tax rate for foreign workers: (As-is) 5 years from the start date of work in Korea → (To-be) 20 years from the start date of work in Korea

□ Examples of the period of applying the flat tax rate (As of January 1, 2023)

1. Foreign workers who have been working in Korea for less than five years

 e.g., a foreign worker who started working in Korea from 2021 is applicable to the flat tax rate by 2040

2. Foreign workers who have been working in Korea for more than five years

 e.g., the application of the flat tax rate for a foreign worker who has been working in Korea since 2016

    - 2016 to 2020: Applicable

    - 2021 to 2022: Not applicable

    - 2023 to 2035: Applicable

In other words, retroactive application to those two years, 2021 and 2022, when the special flat tax rate was not applied because 5 years from 2016 has been passed, is not possible.

3. Foreign workers who start working in Korea after the change in the period of applying the flat tax rate takes effect, including the effective date itself

e.g., a foreign worker who starts working in 2023 can be applied to the flat tax rate until 2042

For more details, please contact the Ministry of Economy and Finance.