Korea tax guide
Deductible Business Expenses for Foreign Freelancers in Korea
3.3% Freelancer Tax
Who this guide is for
- Foreign freelancers filing Korean global income tax
- Tutors, consultants, designers, developers, and creators
- Employees with side business income
- New business owners organizing receipts
Quick Answer
A Korean freelancer's tax is generally based on business income after recognized necessary expenses, not simply gross receipts. An expense should have a clear business connection, belong to the correct tax year, and be supported by reliable evidence. Mixed personal and business costs require a reasonable allocation, while personal living costs and unsupported estimates should not be claimed as business expenses.
Key points
- Start with complete gross revenue before subtracting expenses.
- The expense must be connected to earning business income.
- Keep qualified receipts, tax invoices, card records, contracts, and bank proof.
- Allocate mixed-use items using a consistent business method.
- Expense-rate methods and actual bookkeeping are different approaches.
Step-by-step explanation
Reconcile all revenue first
Build a payer-by-payer revenue list from contracts, bank deposits, platform statements, cash receipts, and Hometax data. Investigate differences instead of reporting only the amount currently visible online.
Apply the business-purpose test
For each cost, write down how it helped produce or maintain business income. Common categories can include professional software, platform fees, supplies, business communications, advertising, professional services, and equipment. The label is less important than the facts and evidence.
Handle mixed use consistently
Phone, internet, workspace, vehicle, and travel costs can include personal use. Use a reasonable and documented business allocation rather than claiming 100% by default. Apply the same method consistently.
Match the filing method
Actual bookkeeping, simple books, and official expense-rate methods do not produce the same calculation. Determine the method and record-keeping obligation for the relevant industry, revenue level, and tax year before finalizing deductions.
Documents you may need
- Client contracts and invoices
- Cash receipts and tax invoices
- Business card and bank statements
- Equipment purchase records
- Software and platform fee receipts
- Travel purpose records
- Workspace allocation worksheet
Common mistakes
- Subtracting expenses before reporting gross revenue
- Claiming personal rent, meals, or travel without a business basis
- Using only bank withdrawals as proof
- Claiming the same cost twice
- Mixing actual expenses with an expense-rate method incorrectly
When should you ask a tax professional?
Ask a qualified tax professional if you have income from several countries, business income, unclear tax residency, treaty questions, missing documents, late filing concerns, or a visa situation that depends on tax records. This site explains general patterns only and cannot review your personal facts.
FAQ
Can a freelancer deduct a laptop?
A business-use portion may be relevant, but the treatment can depend on cost, useful life, capitalization or depreciation rules, and personal use.
Can I deduct home rent?
Do not deduct personal housing automatically. A defensible business-use area, legal business use, allocation method, and evidence may be required.
Is a bank transfer enough evidence?
It proves payment but may not prove the business purpose or supplier details. Keep the invoice, receipt, contract, or other supporting record.
Does 3.3% withholding replace expense deductions?
No. The 3.3% amount is generally prepayment withholding. Final business income can depend on revenue, recognized expenses, deductions, credits, and prior tax.
Official Sources to Verify
Tax rules and filing procedures in Korea may change depending on your visa status, income type, tax residency, and the tax year. Before making a tax decision, always verify your situation with official sources or a qualified professional.