Introduction
Foreigners in Korea often hear the term “tax refund,” but not all tax refunds are the same.
This Korean tax refund for foreigners guide explains the difference between foreign residents and tourists.
In fact, foreign residents working in Korea and tourists visiting Korea follow completely different tax refund systems, handled by different government agencies.
This guide clearly explains:
- ✅ Tax refunds for foreign residents (workers)
- ✅ Tax refunds for tourists (VAT refunds)
- ❌ Why these two are NOT interchangeable
✅ PART 1
Tax Refund for Foreign Residents Working in Korea
(Income Tax / Salary Tax Refund)
Who Is Considered a Foreign Resident?
You are a foreign resident for tax purposes if you:
- Work in Korea (full-time or part-time)
- Receive salary from a Korean employer
- Pay income tax + 4 major social insurances
- Stay in Korea long-term (visa holders)
👉 This section applies to E-7, E-2, D-10, F visas, etc.
What Kind of Tax Refund Is This?
This is an income tax refund, usually related to:
- Overpaid withholding tax
- Year-end tax settlement (연말정산)
- Early resignation during the year
- Multiple employers in one tax year
💡 This refund is handled by the National Tax Service (NTS).
How Much Can Foreign Residents Get Back?
The refund amount depends on:
- Your gross salary
- Withholding tax rate
- Deductions and exemptions
- Length of employment
Many foreigners overpay tax without realizing it.
👉 Before calculating your refund, you must understand how income tax is calculated.
How Income Tax Is Calculated in Korea (2026)
Salary Paid in Foreign Currency?
If your salary is paid in USD or you want to compare values:
👉 Convert your salary to Korean Won using our Exchange Rate Calculator
(before calculating tax refunds)
How to Apply for an Income Tax Refund (Residents)
1️⃣ Through Your Employer (Year-End Tax Settlement)
2️⃣ Directly via National Tax Service (NTS)
3️⃣ Through a Certified Tax Agent
Required documents:
- Income statement
- Withholding tax certificate
- Alien registration card
- Korean bank account
❌ IMPORTANT
This Is NOT for Tourists
If you are not working in Korea, this section does NOT apply to you.
✅ PART 2
Tax Refund for Tourists Visiting Korea
(VAT Refund / Shopping Tax Refund)
Who Is Eligible as a Tourist?
You are considered a tourist if you:
- Visit Korea temporarily
- Do NOT work in Korea
- Shop for goods (clothes, cosmetics, electronics)
- Leave Korea within a short stay
👉 This applies to short-term visitors only.
What Kind of Tax Refund Is This?
This is a VAT (Value Added Tax) refund, NOT income tax.
- VAT is included in product prices
- Refund applies to eligible stores only
- Refund is based on shopping, not salary
💡 This system is managed through customs & refund service providers, not NTS.
How Tourists Get a VAT Refund
Option 1: Instant Refund at Store
Option 2: Refund at Airport (Before Departure)
Steps:
- Shop at tax-free or tax-refund stores
- Request refund receipt
- Complete refund before leaving Korea
Key Differences at a Glance
| Category | Foreign Residents | Tourists |
|---|---|---|
| Tax Type | Income Tax | VAT |
| Based On | Salary | Shopping |
| Agency | National Tax Service | Customs / Refund Services |
| Requires Employment | Yes | No |
| Refund Timing | Months | Immediate / Airport |
❗ Common Mistake Foreigners Make
Many people confuse:
- ❌ VAT refund (tourists)
- ❌ Income tax refund (workers)
They are completely separate systems and cannot be mixed.
Official Sources (2026)
- National Tax Service (Income Tax): https://www.nts.go.kr/english/main.do
- Korea Customs Service (VAT Refund): https://www.customs.go.kr/english/main.do
Final Tip for Foreigners
✔ Working in Korea? → Income tax refund applies
✔ Visiting Korea? → VAT refund applies
❌ Never both at the same time