I. Legal basis

Circular 92/2015/TT-BTC

Official Letter 917/TCT-TNCN

Official Letter 1590/TCT-DNNCN

II. When withdrawing profits after Corporate Income Tax

According to Official Letter 917/TCT-TNCN and Clause 6, Article 11 of Circular 92/2015/TT-BTC, specific regulations on tax payment for profit distribution to investors are as follows:

“c) Income received from capital contribution to limited liability companies, partnerships, cooperatives, joint ventures, business cooperation contracts and other forms of business as prescribed by the Law on Enterprises and the Law on Cooperatives; income received from capital contribution to establish credit institutions as prescribed by the Law on Credit Institutions; capital contribution to securities investment funds and other investment funds established and operating in accordance with the provisions of law.

Do not include in taxable income from capital investment the profits of private enterprises and single-member limited liability companies owned by individuals.” According to the above instructions, the Business Owner of a Private Enterprise or Single-member LLC does not pay Personal Income Tax on profits from capital investment.

III. Salary of Business Owners

According to Official Dispatch 1590/TCT-DNNCN, specific regulations on salary paid to business owners are as follows:

1. Regarding personal income tax on salary of the owner of a single-member LLC owned by an individual:

• Pursuant to Article 90 of the Labor Code No. 10/2012/QH13 dated June 18, 2012, salary is stipulated as follows:

Article 90. Salary

1. Salary is the amount of money that the employer pays to the employee to perform work as agreed.

Salary includes salary according to job or position, salary allowances and other supplements.”

• At Point a, d, Clause 2, Article 2, Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, it is guided as follows:

2. Income from wages and salaries

Income from wages and salaries is the income that employees receive from their employers, including:

1. a) Wages, salaries and amounts of a salary or salary nature in cash or non-cash forms.

….

1. d) Money received from participation in business associations, enterprise boards of directors, enterprise supervisory boards, project management boards, management boards, associations, professional associations and other organizations.”

Based on the above guidance and the Business Registration Certificate, the amount of money received by the Director of a single-member LLC (owned by an individual) is not income from wages and salaries and is not subject to personal income tax.

• Not subject to personal income tax (Except for hiring a director)
• Not included in expenses when determining income subject to corporate income tax (Except for director tax)

IV. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm:

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