Submission of Payment Record

“This is summarized the Article 164 of Korean Income Tax Act.

If you are working with Selim(I.e. Payroll Service Agreement) , Selim will give you an one-stop service for all kind of withholding tax calculation and report service.”

Please see and refer to the followings and the key issues are

1) Timing of income inclusion each company,

2) Timing of submission of Payment Record and

3) Timing of income inclusion each person

l  In case all of the cost is confirmed and fixed on FY 2013 and is paid on January 2014

Please refer to the related Income Tax Act.

Article 164 of Korean Income Tax Act (Submission of Payment Record)

A person who pays an amount falling under any of the following subparagraphs in Korea to an individual liable for the payment of income tax under the provisions of Article 2 (including a corporation, a person who makes a vicarious payment of income amount or who is delegated or entrusted with the payment thereof under the provisions of Article 127 (6), a tax association under the provisions of Article 150, a person for whom the address of main office or principal office is the place of withholding tax payment under Article 7 of this Act or Article 9 of the Corporation Tax Act, and a business proprietor qualified for consolidated return under Article 4 of the Value-Added Tax Act), shall submit a payment record to the chief of a tax office having jurisdiction over the place of withholding tax payment, the Commissioner of the competent Regional Tax Office or the Commissioner of the National Tax Service under conditions prescribed by Presidential Decree by not later than the end of February (March 10 of the following year in cases of earned income under subparagraph 4, and end of the month after next of the month to which the date of suspension or closure belongs in cases where business has been suspended or closed) of the year following the year to which the day of payment belongs (with respect to the income falling under Article 73 (1) 5 as prescribed by Presidential Decree and the income subject to the application of Articles 135 (2) and (3) and 147 (2) through (4), referring to the last day of the taxable year for the relevant income amount; hereafter the same shall apply in this paragraph): Provided, That for any earned income of a daily-paid worker prescribed by Presidential Decree from among earned incomes under subparagraph 4, a payment record shall be submitted by not later than the end of the month following the last month of the quarter to which the payment date thereof belongs (referring to the end of February of next year for the earned income paid in the 4th quarter): (Revised on June 7^th 2013)

1. Interest income

2. Dividend income

3. Business tax subject to the withholding tax

4. Earned income or retirement income

5. Annuity income

6. Miscellaneous incomes (not including service charges under subparagraph 6)

7. Service charges determined by Presidential Decree; and

8. Gain from long-term savings insurances prescribed by the Presidential Decree.