What is Year-end tax settlement?
Year-end tax settlement is a process of finalizing the total amount of income tax to be earned by an employee (excluding daily workers, ex freelancer) for the wage & salary income during the taxable year (January 1st-December 31st), based on the report of income deduction and tax credit, etc. submitted by the employee.
How does it work? Can I get refund?
If the amount of total tax withheld monthly is more than the final amount of tax payable, the exceed amount will be refunded to the employee. If the amount of total withheld tax is less, the amount in shortage shall be additionally collected from the employee.
Who is obligated to conduct ‘year-end tax settlement’ ?
When year-end tax settlement is completed, the withholding agent(the employer or it’s tax agency) should issue a receipt for wage & salary income tax withholding to the employee by the end of February. If a employee with only wage & salary income paid income tax through year-end tax settlement, she does not need to file a finalized return of global income tax base.
Reference) Income Tax Rate for Individual
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