How to file taxes as a freelancer in Korea?
I'm a freelance graphic designer on an E-7 visa. This is my first year doing freelance work in Korea and I'm confused about taxes.
1. Do I need to register as a sole proprietor (사업자등록)?
2. What tax rate applies to freelancers?
3. When is the tax filing deadline?
4. Can I deduct business expenses (computer, software, etc.)?
5. Do I need an accountant or can I file myself?
I earn income from both Korean and overseas clients.
1 Answer
Freelance taxes in Korea can be tricky, but here is a clear guide to get you through it.
The key deadline to remember is May, when you file your annual income tax return (종합소득세 신고) for the previous year. You can do this through Hometax (hometax.go.kr), which has an English option. Before you start, you'll need your business registration (사업자등록) if you earn regularly as a freelancer, along with all your invoices, income records, and expense receipts for deductible items.
The tax rate is progressive, ranging from 6% to 45% depending on your income bracket. Most freelancers fall in the 6-15% range, so it's not as scary as it sounds. You can deduct work-related expenses like equipment (computer, software), office space or coworking fees, transportation costs for work, and professional development expenses.
If you find the process confusing, there are English-speaking tax accountants (세무사) who specialize in helping foreigners. It usually costs around 200,000-300,000 KRW for annual filing, which is well worth it for the peace of mind and potentially larger deductions they can find. You can also visit your local tax office where they offer free filing assistance during May.