When you own the copyright of a certain
song, a profit will occur when you receive a monthly settlement (copyright
royalty) and when you sell the copyright at a price higher than the amount you
have used to purchase it, both of which shall be classified as ‘Other Income.’
In the case of ‘Other Income,’ you can
select ‘separate taxation’ to conclude your tax obligation if the income per
case is less than 50,000 KRW and your annual other income (total) is less than
3,000,000 KRW.
However, if your annual other income
(total) exceeds 3,000,000 KRW, you must add the ‘Other Income’ to the global
income tax base and report it by the end of late May every year.
When does taxation
occur while using Musicow?
1. When your copyright royalty income
exceeds 50,000 KRW
2. When your sales revenue exceeds
50,000 KRW
Musicow Tax Return Filing
* NO withholding tax when below 50,000
KRW/case, which is the tax threshold.
[See: INCOME TAX ACT Standards for
Enforcement 84-0-1 [Sphere of Application of Other Income Tax Threshold (by
case)]
* If the copyright royalty and sales
revenue exceed 50,000 KRW per case, 22% of the total revenue will be withheld.
Then, you must report your revenue as ‘other income’ and pay the taxes.
* The ‘other income’ of Musicow does NOT
exclude necessary expenses.
** If you have the following income, you
are subject to the Global Income Tax Return
1. Total amount of below 50,000 KRW/case +
above 50,000 KRW/case exceeds 3,000,000 KRW/year
2. Only have cases that are below 50,000
KRW/case, and ‘other income’ exceeds 3,000,000 KRW/year
3. Only have cases that are above 50,000
KRW/case, and ‘other income’ exceeds 3,000,000 KRW/year
4. The total amount of other income
(excluding necessary expenses) outside of the income from Musicow exceeds
3,000,000 KRW/year
How to file a Global
Income Tax Teturn
* Period: May 1st ~ 31st
every year
* Procedure:
1. Visit the homepage of National Tax Service (http://www.hometax.go.kr) and file it yourself
2. Visit a tax office under local
jurisdiction to file a tax return
3. Contact a nearby tax accounting office
for professional help
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