A holder of D type visa (D-7, D-8, D-9 and etc.) is required to submit a “certificate of personal tax payment” when applying for extension of the visa. Even if a foreigner is working in Korea and is paid by the headquarter company overseas, he/she is imposed a class B earned income tax (을종근로소득세 부과 대상) unless there is special provision on the tax agreement or treaty between Korea and his/her country of nationality

To prevent tax evasion and establish public order in paying taxes;

A. A person who has joined the Class B Tax Association (을근납세조합) and competed tax obligation through year-end tax settlement after monthly income tax withholding by the Association. For the extension of period of sojourn, he/she needs to submit a receipt for class B earned income tax withholding (을종근로소득원천징수영수증) issued by the head of the Class B Tax Association.

B. A person who has not joined the Class B Tax Association but reported and paid the global income tax (종합소득세 신고/납부). For the extension of period of sojourn, he/she needs to submit a certificate of income amount (소득금액증명원) issued by the competent district tax office.

In case of class B earned income, a payer is not in Korea, so the employees themselves have the obligation to pay their taxes. If the person has joined the Class B Tax Association, the association withholds income tax monthly and pays it to the competent district tax office before the 10th of the next month. If he/she has not joined the Association, he/she must report for the income tax in May next year.

Host companies in Korea often think that the assignee is not obligated to pay for his/her income tax in Korea because they he/she receives a salary from oversea. When the host company realizes that the assignee needs to pay for the tax, it could be late. The application for the extension may have to be delayed because of this tax document.