(1) Where any person pays a foreign corporation the amount of domestic source income provided for in subparagraphs 1, 2, and 4 through 10 of Article 93 (excluding any resident or non-resident who pays the amount of domestic source income accrued from transfer of real estate, etc. provided for in subparagraph 7 of Article 93) which is not substantially related to the domestic place of business of the foreign corporation or does not revert to the domestic place of business of the foreign corporation (including an amount paid to a foreign corporation with no domestic place of business), he or she shall withhold, as the corporate tax, the following amounts from the income of the relevant foreign corporation for each business year, and pay it at the tax office having jurisdiction over the place of tax payment, etc., as prescribed by Presidential Decree, by the tenth day of the month following the month in which the date of withholding falls, notwithstanding Article 97; provided, the same shall not apply to income provided for in subparagraph 5 of Article 93, which is taxable as domestic source business income under the applicable tax treaty: <Amended on Jan. 1, 2013; Dec. 20, 2016; Dec. 24, 2018; Dec. 31, 2019; Dec. 22, 2020>
1. Domestic source interest income in subparagraph 1 of Article 93: Any of the following amounts:(a) Interest income accrued from the bonds issued by the State, a local government, or a domestic corporation: 14/100 of the amount paid;(b) Interest income other than those in item (a): 20/100 of the amount paid;
2. Domestic source dividend income in subparagraph 2 of Article 93: 20/100 of the amount paid;
3. Domestic source income accrued from the rental of ships, etc. in subparagraph 4 of Article 93 and domestic source business income in subparagraph 5 of Article 93 (excluding income taxable as domestic source business income under any tax treaty): 2/100 of the amount paid;
4. Domestic source income accrued by rendering personal services in subparagraph 6 of Article 93: 20/100 of the amount paid; provided, 3/100 of the amount paid for the income deemed to have accrued in the Republic of Korea according to a tax treaty by rendering personal services prescribed by Presidential Decree, among personal services rendered abroad;
5. Domestic source income accrued from transfer of real estate, etc. in subparagraph 7 of Article 93: 10/100 of the amount paid; provided, where the acquisition value and transfer expenses of the amount paid are verified, an amount equivalent to 10/100 of the amount paid or an amount equivalent to 20/100 of capital gains on a transfer of such assets, whichever is smaller;
6. Domestic source income accrued from usage in subparagraph 8 of Article 93: 20/100 of the amount paid;
7. Domestic source income accrued from transfer of securities in subparagraph 9 of Article 93: 10/100 of the amount paid (where it falls under Article 92 (2) 2, referring to "arm's length price" in the same subparagraph; hereinafter the same shall apply); provided, where the acquisition value and transfer expenses of the relevant securities are verified under Article 92 (2) 1 (a), an amount equivalent to 10/100 of the amount paid, etc., or an amount equivalent to 20/100 of the amount calculated under the proviso to the same subparagraph, whichever is smaller;
8. Other domestic source income in subparagraph 10 of Article 93: An amount according to the following classification:(a) Income prescribed in subparagraph 10 (j) of Article 93: 15/100 of the amount paid;(b) Income prescribed in subparagraph 10 (k) of Article 93: Amount according to the following classification; provided, when exchanging or withdrawing virtual assets, it shall be an amount prescribed by Presidential Decree and expressed in units of virtual assets, equivalent to the following:(i) Where the acquisition value, etc. of virtual assets is verified under Article 92 (2) 1 (b): the lesser of the amount equivalent to 10/100 of the paid amount and the amount equivalent to 20/100 of the amount calculated under the same item;(ii) Where the acquisition value, etc. of virtual assets is not verified under Article 92 (2) 1 (b): 10/100 of the paid amount;(c) Income other than the income prescribed in items (a) and (b): 20/100 of the paid amount (the amount prescribed by Presidential Decree, in the case of income prescribed in subparagraph 10 (c) of Article 93).
(2) Deleted <Dec. 31, 2022>
(3) Deleted. <Dec. 31, 2011>
(4) Where a person liable for withholding fails to withhold corporate tax from the income of a foreign corporation for each business year under paragraphs (1) and (5) through (12) or fails to pay the withheld corporate tax by the payment deadline specified under paragraph (1), the head of the tax office having jurisdiction over the place of tax payment shall additionally collect, as corporate tax, the amount referred to in Article 47-5 (1) of the Framework Act on National Taxes from the person liable for withholding in the same manner as national taxes are collected. <Amended on Dec. 31, 2011>
(5) Any person who pays domestic source income referred to in subparagraph 1, 5, 6, or 8 of Article 93 with foreign loan funds to a foreign corporation with no domestic place of business shall withhold tax from the relevant income pursuant to paragraph (1) each time he or she pays the relevant income to the foreign corporation in accordance with the terms of payment stipulated in the contract, although he or she does not directly pay the income in accordance with the terms of payment stipulated in such contract.
(6) The local agency of a foreign corporation operating a ship or aircraft providing international service which does not fall under Article 94 (3) shall withhold tax from the amount of domestic source income of the foreign corporation under paragraph (1) when it pays the foreign corporation the income accruing from the ship or aircraft providing international service.
(7) Where securities referred to in subparagraph 9 of Article 93 are transferred through an investment trader or investment broker registered under the Financial Investment Services and Capital Markets Act, the investment trader or investment broker shall withhold tax, as prescribed in paragraph (1); provided, where outstanding stocks are transferred when stocks are listed as prescribed in the Financial Investment Services and Capital Markets Act, the corporation which has issued such stocks shall withhold the tax.
(8) Any person who pays a foreign corporation an amount of domestic source income accruing from architectural works, construction, the installation or assembly of machines, etc., other works, or the provision of any service for supervision, control, etc. of such works, or any amount of domestic source income earned by providing personal services as referred to in subparagraph 6 of Article 93 (including where such income is classified as business income under a tax treaty) shall withhold the tax, as prescribed in paragraph (1), although the relevant income reverts to the domestic place of business; provided, the same shall not apply where the relevant domestic place of business has registered as a business operator under Article 111. <Amended on Jan. 1, 2014>
(9) Where domestic source income referred to in paragraph (1) is paid in a foreign country and a person who pays the income has an address, residence, headquarters, main office, or place of business (including the domestic place of business referred to in Article 120 of the Income Tax Act) in the Republic of Korea, paragraph (1) shall apply, deeming that the income payer has paid the relevant domestic source income in the Republic of Korea.
(10) Where domestic source income referred to in Article 93 is paid to a foreign corporation as a result of an auction under the Civil Execution Act or a public sale under the National Tax Collection Act, the person who distributes proceeds from such auction or public sale shall withhold the tax in accordance with paragraph (1) from the amount actually paid to the foreign corporation. <Amended on Jan. 1, 2014>
(11) The acts of a person representing or commissioned by a person liable for withholding provided in paragraphs (1) and (5) through (10) shall be deemed the acts of the principal or his or her delegate within the scope of the delegation or commission, to which paragraphs (1) and (5) through (10) shall apply.
(12) Where a financial company, etc., acquires, trades or brokers bills or debt certificates issued by a domestic corporation or makes such transactions on behalf of the financial company, etc., paragraph (11) shall apply, deeming that the financial company, etc., has the agency or commission relationship with the relevant resident.
(13) When any person liable for withholding withholds corporate tax under paragraphs (1), (5) through (12) and (16), he or she shall issue a withholding receipt stating the amount of payment and other necessary matters to the person who receives the income, as prescribed by Presidential Decree. <Amended on Dec. 22, 2020>
(14) A domestic corporation which has issued stocks, etc., shall collect the withholding tax on the domestic source income referred to in subparagraph 10 (i) of Article 93 from the foreign-related party who holds such stocks, etc., at the time prescribed by Presidential Decree. <Amended on Dec. 31, 2011>
(15) Detailed methods for withholding under paragraph (14) shall be prescribed by Presidential Decree.
(16) Notwithstanding paragraph (1), domestically sourced other income of a foreign corporation referred to in subparagraph 10 (k) of Article 93 that is generated through a virtual asset service provider, etc. shall be withheld by the virtual asset service provider, etc. in the amount pursuant to paragraph (1) 8 (b), and the payment shall be made to the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, by the 10th of the month following the month in which virtual assets or cash is withdrawn (if not withdrawn from January 1 to December 31 of each year, it shall be by January 10 of the following year). <Added on Dec. 22, 2020>
(17) In applying paragraph (16), the method by which a virtual asset service provider, etc. verifies whether a person who transfers, lends, or withdraws virtual assets is subject to withholding tax under paragraph (1) 8 (b) shall be prescribed by Presidential Decree. <Added on Dec. 22, 2020>[This Article Wholly Amended on Dec. 30, 2010]