Withholding tax in South Korea 2026

Korean payers withhold 20% on dividends, royalties and personal-service fees and 14% on bond and deposit interest (each plus 10% local surtax) from non-residents; business income without a local establishment is skimmed at 3% of gross.

Treaty relief is application-driven: submit the forms before payment, or (for omnibus accounts since 2024) accept full withholding and claim the refund within 5 years.

At a glance

top rate: 22% (20% + local) on dividends, royalties, services
entry band: 3% on business gross proceeds
tax year basis: Withheld when paid
filing deadline: Final for withheld passive income; net elections available for services
residency basis: Korean-source payments to non-residents
regime flag: Property/securities buyers withhold min(10% gross, 20% net)

Rates

Withholding on non-residents (2026, before local surtax)

Rate	Base	Applies to
14%	Gross	Interest on bonds and deposits
20%	Gross	Dividends; interest on private loans; royalties; independent personal services (net-basis election possible)
3%	Gross proceeds	Business income without a Korean establishment; certain treaty-sourced technical fees
20%	Gross	Foreign sports professionals on contracts under 3 years (from 2025)
Lower of 10% gross / 20% net	Sale amount	Securities and real estate sales — withheld by the buyer (individual property buyers exempted)

Thresholds & allowances

Treaty procedureAdvance application
Reduced rates require forms before payment; refunds via the withholding agent (or the taxpayer for omnibus-account income) within 5 years
Designated jurisdictionsPrior approval
Treaty benefits via Labuan require advance tax-office approval

Residency

Residency trigger

Withholding closes the file for most passive income; net-basis filing is open for service providers within 3 months of finishing the work.

Non-resident treatment

Employment for Korean workdays runs through payroll or taxpayer associations (with a small credit); local income tax at 10% of the national bill follows every charge.

Notes

The Supreme Court holds that royalties for patents not registered in Korea escape Korean source under the United States treaty — a long-running dispute area.
Since 2024, omnibus-account income is withheld at full domestic rates first, with beneficial owners claiming treaty refunds afterward.
Non-residents with a Korean place of business or real-estate income file like residents, minimum tax included.

FAQ

What does South Korea withhold on payments abroad?

Before treaties: 20% on dividends, royalties and service fees, 14% on most interest, 3% on business gross — each plus a 10% local surtax; treaty rates require advance applications.

How are non-resident sellers of Korean assets taxed?

The buyer withholds the lower of 10% of the price or 20% of the gain on securities and property sales — credited against the final liability, with treaty exemptions available on pre-filed certificates.

Figures: tax year 2026, compiled from public sources. Not tax advice.

See withholding tax in other countries

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