US Expat Taxes In South Korea
Tax Guide for Americans Living in South Korea
Understanding South Korea income tax laws is essential for Americans living in South Korea. Residents pay taxes on worldwide income, while non-residents pay only on Korea-sourced income. U.S. expats must also meet IRS requirements, preventing double taxation through credits and exclusions.
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Expat Tax Deadline
For U.S. expats, the automatic tax filing extension deadline is June 16th in 2025. If more time is needed, filing Form 4868 before this date extends the deadline to October 15th. The FBAR must also be submitted by October 15th. Certain special cases may qualify for an additional extension until December 15th.
Understanding Taxes in South Korea for Foreigners
Taxes in South Korea for foreigners depend on residency status. Those residing for over 183 days annually are taxed on global income. Americans living in South Korea must file local and U.S. taxes, using tax treaties and credits to avoid double taxation.
Tax Requirements
Residency for Tax Purposes
Residents (183+ days in Korea) are taxed on worldwide income. Non-residents are taxed on Korean income.
Income Tax Rates
Progressive tax rates range from 6% to 45%, depending on income level.
U.S. Federal Tax Return (Form 1040)
Americans living in South Korea must file a U.S. tax return annually, reporting all global income.
Foreign Tax Credit (FTC)
U.S. expats can offset South Korean income tax against U.S. tax obligations to prevent double taxation.
Foreign Earned Income Exclusion (FEIE)
Expats can exclude up to $120,000 (2023) of foreign income if they meet residency or physical presence tests.
Self-Employment Tax
Self-employed U.S. expats in Korea must pay local taxes but may still owe U.S. self-employment tax.
Tax Treaty Between the U.S. & South Korea
Prevents double taxation and outlines which country taxes specific types of income.
National Pension Contributions
Expats may contribute to Korea’s pension system, and the U.S.-Korea Totalization Agreement affects eligibility.
FBAR & FATCA Compliance
U.S. expats with financial accounts exceeding $10,000 must file FBAR and may need to file FATCA reports.
Tax Facts for Americans Living in South Korea
So does Korea have taxes for Americans? Tax compliance is crucial for Americans living in South Korea. Understanding local tax rates, and U.S. tax requirements can help reduce tax burdens.
Residency Determines Taxation
Residents pay tax on worldwide income; non-residents on Korea-sourced income only.
Tax Treaty Reduces Double Taxation
The U.S.-Korea tax treaty helps expats avoid paying tax twice on the same income.
FBAR & FATCA Requirements
U.S. expats must report foreign bank accounts over $10,000 to the U.S. Treasury.
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We Have All Your Queries Covered
Have questions about your U.S. expat state taxes? We’re here to help. Below are answers to some common queries we encounter from expats around the world.
How does South Korea determine tax residency?
Residency is based on spending 183+ days per year in Korea. Residents are taxed on worldwide income, while non-residents pay tax only on Korean-sourced income.
Do U.S. Expats in South Korea need to file U.S. taxes?
Yes, Americans living in South Korea must file a U.S. tax return, report foreign accounts, and comply with FATCA and FBAR regulations.
What are the South Korea income tax rates?
Tax rates are progressive, ranging from 6% to 45%, based on income brackets.
Can U.S. expats in Korea avoid double taxation?
Yes, by using the Foreign Tax Credit (FTC) or Foreign Earned Income Exclusion (FEIE), expats can reduce or eliminate double taxation.
Are U.S. expats required to contribute to Korea’s National Pension?
Expats working for Korean employers may be required to contribute, but self-employed expats may be exempt. The U.S.-Korea Totalization Agreement affects pension eligibility.
Do U.S. expats in Korea need to file FBAR?
Yes, U.S. citizens must file FBAR if their total foreign account balances exceed $10,000 at any time during the year.
Still have questions? Contact us today to get expert guidance on all your U.S. expat state taxes.
