Outside Seoul, Korea is well known for being a relatively inexpensive country in which to live. While Seoul is one of the most expensive cities to live in the world, this is not necessarily due to taxation. Aside from income tax, which is the most common and the largest chunk of taxation coming out of your pocket in Korea, you will encounter property tax, automobile tax, VAT (value added tax) and sometimes service tax, depending on what you buy and where you buy it.
VAT is commonly added to certain purchases from the grocery store – generally when buying something that has been processed or is more expensive to import into the country. This will be included in the price tag. Whenever you shop at a market what ever is on the price tag is what you will pay. There will never be an additional tax added at the register.
Also, you can expect to pay VAT in Seoul’s more expensive restaurants as well as in most American “sit down” chain restaurants (TGI Friday’s, Outback Steakhouse, etc.). VAT will also be added to services pertaining to aesthetic healthcare, vet services for your pet and other similar services provided to citizens. At a restaurant the VAT will be totaled into the final bill. It is usually 10% and will be clearly stated on your receipt. For other services (vet, healthcare, etc.) you can expect this to be included in the total price that you pay.
Service tax is added to your restaurant bill if you have been dining in an upscale or American style restaurant. As was previously mentioned in this guide, tipping is not customary in Korea and it is usually considered rude to offer a tip for service. In these restaurants, however, it is automatically added to your bill and then divided among the restaurant staff accordingly. You will not usually pay a service tax anywhere else.
Property and automobile tax is basically for those who use their property/automobile commercially. The amount of tax is decided upon by an official who has inspected the property or vehicle. This occurs on a yearly basis and the amount of tax payable is dependent on the value of said property and what it is being used for.
Other small taxes are payable in Seoul but are rarely a matter of concern. The above taxes are the ones you will most likely run into on a regular basis. For information on specific taxes, you can contact your district tax office (http://www.nts.go.kr/eng/help/help_41_1.asp?top_code=H001&sub_code=HS04&ssub_code=HSD1) or call the National Tax Service Hotline at 397-1440 (during office hours) or 1588-0560.
