1. Taxable annuity income

(1) Annuity income generated by the nationalpension payment made before year 2001 is taxable for general income tax.

(2) In case a tax payment was subject totax exemption, annuity income is taxable upon the time of acceptance and a taxpayment which is not subject to tax exemption, annuity income is nottaxable. 

<2> Withholding tax for annuityincome

<3> Final declaration of generalincome tax

(1)public annuity – The public pensionshall be withheld at the time of pension payment based on the basic tax tableeach month and the tax obligation shall be terminated after making thesettlement for year-end settlement. In case there is an additional income asidefrom annuity income, the total income shall be summed up and be filed forgeneral income tax.

(2) Private annuity – Private annuity issubject to withholding tax at the rate of 3~5% at the time of disbursement andit is principle to declare general income tax except for separate tax.

1: Compulsory separation tax – Annityincome generated based on pension income which was not withheld in accordancewith Article 146(2) of the Legislation (retirement allowance transferred to the pension account).

2: Selective Taxation – In case private annuity amount is less than 12million won, the taxpayers may choose between separate taxation or sum taxation(Article 14, Paragraph 3, Article 9)