KUALA LUMPUR - South Korea has expanded tax benefits for foreign workers, including eligibility for housing savings income deductions starting this year.

The National Tax Service said the year-end tax settlement schedule and procedures for foreign workers are the same as those applied to domestic employees.

It said companies that register recipients of simplified tax settlement data on the HomeTax system by January 10 can receive the data by January 15 for workers who consent.

Foreign workers with total annual salaries of 70 million won or less may now claim income deductions for housing savings.

Eligible workers can deduct 40 per cent of their housing savings deposits from taxable income, capped at three million won annually.

The benefit applies to spouses of non-homeowner household heads, in line with existing rules for local residents.

Foreign workers providing specialised technology under engineering contracts or holding at least a bachelor’s degree in science, technology, engineering or mathematics with overseas research experience are eligible for a 50 per cent income tax reduction for up to 10 years.

It said outstanding overseas talent covered under the Special Act on Innovation in Advanced Industry Talent is also eligible for tax reductions on labour income received after February 28 last year.

Foreign workers may choose between a flat 19 per cent tax rate or the standard progressive income tax rate for up to 20 years from the start of their employment in South Korea.

Those opting for the 19 per cent flat rate, however, are not entitled to tax exemptions, deductions, reductions or credits under existing tax laws.

Native-speaking teachers from countries covered by teacher exemption clauses in tax treaties may qualify for full income tax exemptions.

The National Tax Service said further details are available in the year-end tax settlement guidebook on its English-language website or via its foreigner consultation hotline.