--- title: "COLUMN: Tax Journey with Yesong 01" description: "Korea's accommodation owners often overpay taxes simply from lacking the right info. CPA Song Yong-kwon launches a new ONDA column to break down the key taxes you'll face over the year and when they're due." published: 2020-06-23T00:00:00+00:00 author: "ONDA 편집팀" category: "Insights" canonical: https://global.onda.me/en/blog?slug=column-yesonggwa-hamggehaneun-segeumyeohaeng-01 locale: en --- # COLUMN: Tax Journey with Yesong 01 ## 01. What Taxes Do You Need to Pay Over the Year? **Writer: Song Yong-kwon, CPA, CEO of Yesong Tax & Accounting** **Editor: ONDA Manager Lee Chae-eun** ![](https://zqcfqfqgiyckyhazcfrk.supabase.co/storage/v1/object/public/blog-images/webflow/6316f3f75130788ec2d762dd/65a8b2338e434747787d3c61_62ce59de9e01c63f0f145e6d_5ef081f9f354c94911b57552_200622_2520_25E1_2584_258B_25E1_2585_25A8_25E1_2584_2589_25E1_2585_25A9_25E1_2586_25BC_25E1_2584_2589_25E1_2585_25A6_25E1_2584_2586_25E1_2585_25AE_25E1_2584_2592_25E1_2585_25AC_25E1_2584_2580_25E1_2585_25A8_25E1_2584_2582_25E1_2585_25A6_25E1_2584_258B_25E1_2585_25B5_25E1_2586_25B7_25E1_2584_258F_25E1_2585_25A1_25E1_2584_2583_25E1_2585_25B3_25E1_2584_258E_25E1_2585_25AC_25E1_2584_258C_25E1_2585_25A9_25E1_2586_25BC.001.jpeg) At Yesong Tax & Accounting, our team of young CPAs specializes in providing professional tax services to business owners across diverse industries. We've built a system where you can consult directly with a CPA anytime—no pressure—for tax services and broader business advice. I've seen too many cases where business owners pay unnecessary taxes simply because they lack the right information. I hope to prevent that from happening to accommodation operators. That's why I'm starting this series. I hope these columns on ONDA can offer you some real value. > **Blog:** [**https://blog.naver.com/tax5339**](https://bit.ly/taxtrip_blog) > **KakaoTalk Channel:** [**http://pf.kakao.com/\_udxcPT/chat**](https://bit.ly/taxtrip_kakao) ![Photo by Olga DeLawrence on Unsplash](https://zqcfqfqgiyckyhazcfrk.supabase.co/storage/v1/object/public/blog-images/webflow/6316f3f75130788ec2d762dd/65a8b25e0e4a38dea070315e_62ce59e29e01c64e82145eb5_5ef075cb81a7d47a8a928832_Photo_2520by_2520Olga_2520DeLawrence_2520on_2520Unsplash.jpeg) Hello, this is Yesong Tax & Accounting. Starting this June, ONDA and I will be sharing tax insights that accommodation owners frequently ask about. Running a lodging business means encountering more taxes than you probably anticipated. And when you're already stretched thin managing daily operations, finding time to understand each tax in detail is tough. Through this series, I hope to give you a solid overview of the key taxes you need to know—and help you use that knowledge to your advantage. In today's first column, we'll cover **the major taxes you need to pay over the course of a year** when operating an accommodation business. Knowing what taxes are due—and when—will help you manage cash flow and plan better across the board. First, taxes fall into two broad categories: national taxes and local taxes. **Local taxes** are levied to fund regional governments. There are various types, but for accommodation operators, local taxes typically amount to about 10% of your national tax burden. **National taxes** fund the central government. There are 13 types in total, but the four directly relevant to accommodation businesses are: **value-added tax (VAT), corporate income tax, personal income tax, and withholding tax**. Now let's walk through each of these major taxes using the **_Tax Payment Calendar_** chart below. ![](https://zqcfqfqgiyckyhazcfrk.supabase.co/storage/v1/object/public/blog-images/webflow/6316f3f75130788ec2d762dd/65a8b25d0e4a38dea070313d_62ce59e3bbcee818021b43aa_5ef075a31cba831d2a0cf1cd_25E1_2584_2589_25E1_2585_25A6_25E1_2584_2586_25E1_2585_25AE_25E1_2584_2589_25E1_2585_25A11_25E1_2584_2592_25E1_2585_25AC.001.jpeg) ### 1. Value-Added Tax (VAT) Value-added tax (VAT) is **a 10% tax applied on purchases and sales**. It applies to nearly all goods and service transactions, except for simple personal labor, certain medical services defined by law, and essential goods. VAT is critical because it's the primary way tax authorities track and monitor each business's revenue. Filing your VAT returns properly is essential—it sets the stage for a clean personal income tax filing later. For individual taxpayers, VAT filers are classified as either simplified taxpayers or general taxpayers. **The dividing line is ₩48 million in annual revenue**. If your annual revenue is below ₩48 million, you're classified as a simplified taxpayer, which means a lighter tax burden. If it exceeds ₩48 million, you're a general taxpayer. Individual business owners file VAT **twice a year (semi-annually)**. Corporate taxpayers file **four times a year (quarterly)**. **The filing and payment deadline is the 25th of the month following each period.** ### 2. Personal Income Tax (Comprehensive Income Tax) Personal income tax (or comprehensive income tax) is **a tax on all your personal income combined—from January through December**. **The filing and payment deadline is May 31.** For example, if your annual revenue is ₩11 million (including ₩1 million in VAT), the tax applies to the ₩10 million base after VAT is removed. If you also earn income from employment, pensions, or financial investments, those are included in the total and taxed together. A common misconception: some business owners think the simplified vs. general taxpayer classification for VAT also applies to personal income tax. It doesn't. That distinction only matters for VAT. When it comes to personal income tax, your total tax burden is the same regardless of VAT classification—assuming identical revenue and expenses. ### 3. Corporate Income Tax Corporate income tax is essentially the business version of personal income tax—but for corporations, not sole proprietors. It's **a tax on all corporate income earned from January through December**. **The filing and payment deadline is March 31.** Assuming high revenue, corporate tax rates are significantly lower than personal income tax rates—so from a pure tax perspective, incorporation can be advantageous. However, corporations face stricter rules around cash management and fund usage. Don't rush into incorporation just to save on taxes. I strongly recommend consulting with a CPA first to evaluate your full situation. ### 4. Withholding Tax Withholding tax refers to taxes on payroll—sometimes called wage withholding. You might wonder, _"Why is there a tax on paying salaries?"_ Here's how it works: when you pay an employee, you deduct a certain amount from their paycheck and remit it to the tax authorities on their behalf. That deduction is the withholding tax. **In short: withholding tax means you deduct a set amount from employees' monthly wages and pay it to the government on their behalf.** This is mandatory. Failing to file or pay withholding tax can jeopardize your ability to claim payroll as a business expense—so it's a critical step. The amount you withhold depends on the employee's employment type. There are several structures, but the three most common are: **_1. Hiring a regular employee with full social insurance (4 major insurances)_** **_2. Hiring a freelancer under the 3.3% withholding structure_** **_3. Hiring daily workers_** Withholding tax is **filed and paid by the 10th of the month following payroll**. If filing 12 times a year is burdensome, you can switch to a semi-annual schedule—filing and paying twice a year instead. ### 5. Closing Thoughts Today we covered the four foundational taxes accommodation operators need to understand: VAT, personal income tax, corporate income tax, and withholding tax. Each has important nuances, and I'll unpack them in future columns. Next time, we'll dive into **the principles and types of VAT in detail**. Thanks for reading. **\[Series Outline\]** **1. What Taxes Do You Need to Pay Over the Year?** 2. VAT Principles and Types 3. Income Tax Principles, Filing & Payment 4. Tax Issues by Accommodation Type 5. Commission Settlements and Taxes by Sales Channel 6. Q&A ## [\>>Subscribe to Weekly ON](http://bit.ly/WeeklyOn)