I would like specific guidance on the withholding tax filing method, procedure, place of taxation, and submission deadline.

The matter you mentioned corresponds to the case where an individual business owner pays personal service compensation to a freelancer (individual) without business registration, and is a typical case where the withholding obligation arises.

First, if the freelancer receiving payment is an individual without business registration, the service compensation generally falls under business income or other income under the "Income Tax Act."

In this case, since the payer individual business owner becomes the withholding agent, they must withhold income tax in advance when paying the amount and report and pay it to the state.

The withholding time is based on the actual payment date, and if the payment timing is delayed until a specific period, special provisions for withholding timing may apply.

The withheld income tax must be reported and paid to the competent tax office by the 10th of the month following the month in which the payment date falls.

However, if you have received approval for semi-annual payment by meeting certain requirements, reporting and payment by the 10th of the month following the last month of the half-year are possible.

Also, when the special provisions for withholding timing apply, the relevant payment statement must be submitted by March 10 of the year following the year in which the income amount taxation year ends.

The place of taxation is based on the location of the business, and for local income tax, earned income and retirement income are reported and paid to the local government having jurisdiction over the workplace, and other income is reported and paid to the local government having jurisdiction over the payment location.

When the withholding agent has withheld income tax, local income tax must also be specially collected together.

Local income tax is 10% of the withheld income tax and is reported and paid simultaneously with income tax.

The place of taxation for local income tax is as follows.

- Earned income/retirement income: Local government having jurisdiction over the workplace

- Other income/personal service income, etc.: Local government having jurisdiction over the income payment location

For Seoul, reporting and payment is done through Seoul Etax, and for other regions, through Wetax.

When reporting, the withholding tax calculation statement and payment statement must be attached, and since the withholding tax rate may vary depending on the type of income and payment amount, it is safer to receive a review by a tax specialist attorney for specific amount calculation and report preparation regarding the withholding tax filing method.

Through this, you can prevent additional taxes or disadvantages due to incorrect reporting.

Accurately understanding and preparing the withholding tax filing method, submission deadlines, and place of taxation can minimize tax risks that may arise in the process of business owners paying amounts to freelancers.