Filing Report and Payment of Corporate Tax of Foreign Corporation
1. Foreign corporations subject to filing report and pay
Regarding corporate tax report, payment, and determination of income accrued from domestic sources for each business year, paragraph 1 and 2 of article 57, article 58, article 58-3, article 59, article 60 (excluding an earned surplus settlement statement or deficits settlement statement of subparagraph 1, paragraph 2 of the same article), article 62 and article 63 to 64, article 66 to 71, article 73 to 75-9 are applicable (paragraph 1, article 97 of the Corporate Tax Act) to the following foreign corporation and the corporate tax base and the tax payable on income for each business year shall be reported and paid as well as domestic corporations in accordance with article 60 of the Corporate Tax Act and the like:
① A foreign corporation with a domestic place of business or a foreign corporation that has income accrued from transfer of real estate (also known as ‘a foreign corporation with a domestic place of business’) is subject to payment and filing of report/general taxation.
② A foreign corporation with income accrued from transfer of real estate, but does not fall under ① is subject to payment and filing of a report/pay withholding tax.
Even though a foreign corporation does not have domestic source income that revert to the domestic place of business, the corporation shall file a report in accordance with Article 60 of the Corporate Tax Act and etc., if the corporation has domestic place of business.
2. Incomes subject to filing report
In case of a foreign corporation with domestic place of business, only domestic source income that revert to the domestic place of business is subject to general taxation and domestic source income that doesn’t revert to the domestic place of business is withheld and subject to separate taxation. So, only the incomet hat revert to the domestic place of business is subject to filing report and payment of corporate tax.
However, a foreign corporation with income accrued from transfer of real estate shall file a report, make a payment, and subject to general taxation. In addition, the income shall be preemptively withheld (in case the buyer is the corporation), and file a report and make a payment.
Regarding business income of the corporation of the state with which the Republic of Korea has signed a tax treaty, only the business income that revert to the domestic place of business is subject to taxation.
3. Filing deadline
A foreign corporation liable to pay tax shall file a report on the corporate tax base and the tax payable on income for the relevant business year within three months from the end date of the month in which the end date of each business year falls, to the head of the tax office having jurisdiction over the place of tax payment (Article 60 of the Corporate Tax Act).
If the due date or the interim payment deadline falls on a legal holiday, Saturday, or Workers' Day, the due date shall be the day following such holiday, Saturday or Workers' Day (Paragraph 1, Article 5 of the fr