New Simplified Half-Year Withholding Tax Statement Filing Requirements for Companies Paying Salary & Wage Income or Business Income Starting from 2019

l New Simplified Half-Year Withholding Tax Statement Filing Requirements for Companies Paying Salary & Wage Income or Business Income Starting from 2019

Starting from 2019, under Article 164-3 of the amended Individual Income Tax Law (IITL) of Korea, all companies(withholding agents) who pay salary and wage income or business income are required to submit simplified half-year withholding tax statement to the governing tax office on a semi-annual basis by the filing due dates further explained below.

Due Date of Filing the Statement

• Employers (withholding agents) should submit the simplified half-year withholding tax statement by the 10th day of the following month after the end of each half-year period as follows:

Tax Period		Submission Due Dates
1st half year period	For the income earned from January to June	By July 10 of the same tax year
2nd half year period	For the income earned from July to December	By January 10 of the following year

• The Simplified Half-Year Withholding Tax Statement is an additional tax filing requirement that was newly introduced by the tax authorities in Korea, which is a separate filing requirement from the year-end declaration. The withholding agents should make additional two filings in July (for January to June) and January (for July to December) of the following year on a half year basis on top of the annual year-end payroll income tax withholding statement filing requirement.

• This additional tax filing requirement should be fulfilled by employer only without any additional income tax liabilities to the employees, and as such, there is no impact on employees’ tax positions. Through the simplified half-year withholding tax statement, a summary including half year income (January to June and July to December) should be reported to the tax authorities. Failure to comply with such filing requirements shall be subject to a penalty equivalent to 0.5% of non-reported/underreported amount.