The August resident tax payment season is beginning. It is time to review not only the payment targets, periods, and tax amount criteria, but also the possibility of receiving a refund for overpayment.

What is Resident Tax?

Resident tax is a local tax borne by individuals, corporations, and business owners who are members of a local government. It is classified into three categories: individual, business office, and employee.

Individual Resident Tax: Payment from August 16 to 31

The individual portion is levied on individuals who have their residence in the relevant local jurisdiction as of July 1 each year. In principle, the head of the household is subject to payment, and it can be paid via a notice without a separate declaration. The payment period is from August 16 to 31. The tax amount may vary according to local government ordinances, and some regions also levy a local education tax.

Business Office and Employee Portions Must Also Be Checked

Individual business owners or corporations operating a business premises must also take care of the business office resident tax. It is levied based on the location of the business premises and must be declared and paid annually from August 1 to 31.

The business office portion consists of a basic tax amount and a tax amount based on the total floor area of the business premises. If the total floor area exceeds 330 square meters, an additional tax based on the area is applied, and for corporations, the basic tax amount varies depending on the size of capital or investment funds.

The employee portion is borne by workplaces that pay salaries above a certain threshold. A tax rate of 0.5% is applied to the total amount of salaries paid to employees, and it must be declared and paid by the 10th of the month following the month in which the salary was paid.

Refunds Available for Overpayment or Duplicate Payments

Even if you have already paid your resident tax, you can receive a refund if it was paid incorrectly or in duplicate. Representative cases include double payment of the same tax while using a credit card or a mobile app, incorrect billing from a previous address after moving, and excessive assessment of the business office portion compared to the actual amount paid.

If you are confirmed to be eligible for a refund, you can search for and apply for a local tax refund on Witax. By entering the reason for the refund and your bank account information, the local government will verify the payment details and reason before proceeding with the process. If online application is difficult, guidance can also be obtained through the tax department of the competent city, county, or district office, or the local tax refund department. You should check with your local government to confirm whether telephone or written applications are possible.

5-Year Refund Statute of Limitations: Do Not Delay

Local tax refunds cannot be claimed indefinitely. If the period stipulated by law passes, the right may be extinguished, so if you have received a refund notice or confirmed an overpayment, you must proceed with the process without delay. Generally, a five-year statute of limitations may apply to rights related to local tax refunds.

Tax-Exempt and Reduction Targets Should Also Be Reviewed

The individual portion may be excluded from taxation based on statutory requirements such as age, livelihood benefit recipient status, and the period of stay for foreigners in Korea. For the business office portion of individual business owners, tax obligations also change according to relevant standards, such as the previous year's revenue or value-added tax base. Depending on the total floor area of the business premises, the area-based tax amount may not be levied, so it is necessary to examine the taxation criteria rather than just checking the billed amount.

Payment Methods and Precautions

You can search and pay through the Witax website or mobile services, and you can also use internet banking, mobile banking, or ATMs at financial institutions. If the payment deadline is exceeded, additional burdens such as a surcharge for delayed payment will apply. In particular, since the business office and employee portions may require direct filing in some cases, it is important not to confuse the payment method with that of the individual portion.

As resident tax is a recurring annual tax, it is advisable to comprehensively check the payment targets, deadlines, tax exemption status, and the possibility of overpayment or refunds. Even if you have already paid, if you confirm a duplicate payment or incorrect billing, you can verify the possibility of a refund through Witax or your local government.

[[ The taxation targets, tax amounts, tax exemption and reduction conditions, refund procedures, and the applicability of the statute of limitations for resident tax may vary depending on relevant laws, local government ordinances, and actual reasons for taxation. Before applying for payment or a refund, please be sure to check the latest standards through Witax and your local government. This is an AI-assisted article. ]]