Foreign athlete tax rate risesThe withholding income tax rate for foreign athletes will be raised from 3 percent to 20 percent, according to the Ministry of Strategy and Finance on Monday.
A ministry spokesman said that the change was made because foreign athletes were not reporting their earnings properly in their global income tax returns. “In the past, there were many cases in which foreign athletes did not report income taxes before returning to their home countries at the end of the sports season,” he said.
This is a reversion to the system before 2015, when an athlete with a yearly income of 100 million won ($89,450) would receive 80 million won after 20 percent of their income is withheld through taxes. After 2015, when foreign athletes came to be classified as residents, only 3 percent was withheld from their yearly salary and the rest was required to be paid through after-earnings global income tax.
The problem was that athletes were not completing their tax returns, leading to millions in lost tax revenue for the state. According to the National Tax Service, the amount lost in unpaid taxes by foreign athletes since 2011 has amounted to 9.2 billion won, since most of the 16.1 billion won tax owed by the 157 foreign athletes was never filed or paid.
The tax revision will largely apply to football, basketball, baseball and volleyball players, the majority of foreign athletes in Korea.
BY SUH YOU-JIN, SHIM KYU-SEOK [firstname.lastname@example.org]