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Tax refund procedures
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Ed Provencher



Joined: 15 Oct 2006

PostPosted: Fri Nov 30, 2007 6:30 am    Post subject: Reply with quote

I think it means...

"Final Tax Liability" = The Korean government keeps this amount of what they took.

"Taxes Due" = The Korean government gives me back this amount of what they took.
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sjk1128



Joined: 04 Feb 2005

PostPosted: Tue Dec 11, 2007 11:15 pm    Post subject: 2007 Tax Information Available Reply with quote

I just wanted to let anyone out there who's interested know that the 2007 tax information is now available on the NTS website:
http://www.nts.go.kr/eng/

Everything is similar to previous years, with some slight changes which may affect your deductions (e.g. medical expenses and credit card). A new foreigners' guide and tax calculator are posted that explain everything, so arm yourselves with information lest your employers cheat you unawares!

I'm due a refund of over 1,000,000!!!

Now if I can only get that damn accountant at my last school to pay me back the 103,500 he erroneously deducted from my final paycheck for employment insurance...
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hagwonnewbie



Joined: 09 Feb 2007
Location: Asia

PostPosted: Wed Dec 12, 2007 6:11 am    Post subject: Reply with quote

great post. I just found out that I'm eligible for almost half of what I paid in taxes back! Almost 500,000 won. Seems like all I need is a Korean to help me fill out my forms. Korea Sparkling!
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sconner



Joined: 26 Jan 2006
Location: South Carolina

PostPosted: Wed Dec 12, 2007 8:06 am    Post subject: Reply with quote

This is a great post. Does anyone know if your former employer screwed you on your tax refund in 2006, can you refile and still get the refund? Or are you SOL?
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sjk1128



Joined: 04 Feb 2005

PostPosted: Wed Dec 12, 2007 2:33 pm    Post subject: Sjk1128's tax advice - for what it's worth Reply with quote

Usually your employer completes your year end tax settlement with the information you give him/her - even if you have mutliple employers in the same year. As I understand it, you only file a return if you have something besides normal wage and salary income in Korea: international income, interest income, rental income, etc. If you do file a return, you are supposed to do so during the month of May. If you are just unhappy with how your employer calculated your year end settlement, I suggest several steps. You should talk to your employer first, ask him/her for a copy of the settlement, and inform him/her of the "error." Then document his/her response. Write a letter of complaint and take it to the nearest tax office. The letter and filing the complaint are what you may need a Korean's help for. Figuring out what your tax should be and what your refund or payment should be is simple and all in English on the website.

Good luck!
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Positive Realist



Joined: 11 Jan 2007
Location: Somewhere Damn Azz Cold

PostPosted: Wed Dec 12, 2007 4:13 pm    Post subject: Reply with quote

Do you get a tax return regardless of when you started working in 2006. Most public school teachers began in March, 2006 - Do we get a a refund for the 10 months we paid taxes?
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sjk1128



Joined: 04 Feb 2005

PostPosted: Wed Dec 12, 2007 7:30 pm    Post subject: It's all on the websites... Reply with quote

Yes, you will probably be due a refund even if you worked only part of the year. Just go to the NTS website and plug in all your numbers. There are all kinds of deductions that reduce your tax: education expenses, medical expenses, credit card spending, medical insurance premiums, pension contributions, moving expenses, etc. It's really easy: you just add up your numbers and plug them in the calculator. It spits out a number at the bottom. If the number is negative, your employer owes you that amount back. If it's positive, you owe more tax.

There are also an easy guide and answers to all the questions anyone could have about their Korean taxes on the website in English.

Again, it is your responsibility to provide your employer with your information about deductions; it is his/her responsibility to complete your year end tax settlement and give you back whatever refund you may be due.

But don't listen to me. Please people, just read it for yourselves and stop getting ripped off!!

(BTW, don't forget that a lot of public school teachers are exempt from paying taxes the first 2 years they are in Korea. If you are in that situation, you should get back everything you have paid for taxes this year. Read it all on the NTS site.)
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Rteacher



Joined: 23 May 2005
Location: Western MA, USA

PostPosted: Sun Dec 16, 2007 7:24 pm    Post subject: Reply with quote

I ended up having to pay several hundred thousand won last year because taxes were not automatically deducted on my overtime pay. I'm not sure if that's the case at other high schools (privately owned, but controlled by MOE and GEPIC rules ...)

One thing about claiming exemption from paying Korean taxes is that you could possibly lose your (U.S.) foreign income tax exemption if you don't pay Korean taxes (which are much less ...)
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Ut videam



Joined: 07 Dec 2007
Location: Pocheon-si, Gyeonggi-do

PostPosted: Sun Dec 16, 2007 8:39 pm    Post subject: Reply with quote

Rteacher wrote:
One thing about claiming exemption from paying Korean taxes is that you could possibly lose your (U.S.) foreign income tax exemption if you don't pay Korean taxes (which are much less ...)

This is only the case if the income is earned in a country which is party to a tax treaty with the U.S. (and Korea is not). Under U.S. tax law, the first (approximately) $80,000 of foreign earned income in such a country is generally exempt from U.S. taxation without regard to the tax situation in the foreign country.

If, however, the country where the money was earned is party to a tax treaty with the United States, ALL income earned in that country is exempt. In such a country, the U.S. exemption would be lost if one claimed exemption from that country's taxes. Tax treaties are meant to eliminate double taxation, so if someone claims exemption from one country's taxes, the other country's kick in. The $80,000 exemption exists to provide similar protection to Americans working in countries where no tax treaty exists.

Of course, if I've got this wrong, please correct me (as though I need to ask! Wink )
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Atavistic



Joined: 22 May 2006
Location: How totally stupid that Korean doesn't show in this area.

PostPosted: Sun Dec 16, 2007 8:43 pm    Post subject: Reply with quote

Ut videam wrote:
Rteacher wrote:
One thing about claiming exemption from paying Korean taxes is that you could possibly lose your (U.S.) foreign income tax exemption if you don't pay Korean taxes (which are much less ...)

This is only the case if the income is earned in a country which is party to a tax treaty with the U.S. (and Korea is not).


Better tell that to the IRS. In fact, should've told them back in 1976...

http://www.irs.gov/businesses/international/article/0,,id=169602,00.html
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Ut videam



Joined: 07 Dec 2007
Location: Pocheon-si, Gyeonggi-do

PostPosted: Sun Dec 16, 2007 9:02 pm    Post subject: Reply with quote

Atavistic wrote:
Ut videam wrote:
Rteacher wrote:
One thing about claiming exemption from paying Korean taxes is that you could possibly lose your (U.S.) foreign income tax exemption if you don't pay Korean taxes (which are much less ...)

This is only the case if the income is earned in a country which is party to a tax treaty with the U.S. (and Korea is not).


Better tell that to the IRS. In fact, should've told them back in 1976...

http://www.irs.gov/businesses/international/article/0,,id=169602,00.html


I stand corrected. No need to be snarky about it.

Anyway, if you claim exemption from Korean taxes, you won't get a credit or deduction for the corresponding amount from the U.S. (and vice versa). Check out the IRS' Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad at

http://www.irs.gov/publications/p54/index.html

It includes a section on tax treaties and their benefits.
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Atavistic



Joined: 22 May 2006
Location: How totally stupid that Korean doesn't show in this area.

PostPosted: Sun Dec 16, 2007 9:08 pm    Post subject: Reply with quote

Ut videam wrote:
Atavistic wrote:
Ut videam wrote:
Rteacher wrote:
One thing about claiming exemption from paying Korean taxes is that you could possibly lose your (U.S.) foreign income tax exemption if you don't pay Korean taxes (which are much less ...)

This is only the case if the income is earned in a country which is party to a tax treaty with the U.S. (and Korea is not).


Better tell that to the IRS. In fact, should've told them back in 1976...

http://www.irs.gov/businesses/international/article/0,,id=169602,00.html


I stand corrected. No need to be snarky about it.


That isn't snarky. At least not how I do it.

Here's the thing....I am a public school teacher, so I'm not paying ANY Korean income tax because that's the tax treaty. But when I actually read through the IRS' website, it looks like that only means I can't claim that I lived here for the year. I can still pass the physical presence test. (Cheers to another board member for pointing that out.)
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hogwonguy1979



Joined: 22 Dec 2003
Location: the racoon den

PostPosted: Sun Dec 16, 2007 10:50 pm    Post subject: Reply with quote

also if you've spent money on your korean credit card or have medical bills you can get a refund of some of those monies spent. samsung card just emailed me a form and i got the same from my dentist and gave them to my employer

last year i got 700k just as we hit thailand which was very nice
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bish



Joined: 09 Jun 2007

PostPosted: Thu Dec 20, 2007 7:03 pm    Post subject: Reply with quote

Ok, so I'm a public school teacher. I started September and it's my first time in Korea.

I'm pretty sure I have been paying some tax (I don't have my payslips to hand). Sould I not be doing?

How can I stop myself paying tax from January to September?

Do I have to reclaim tax from September - December before a certain date?

Any help will be much appreciated!
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sjk1128



Joined: 04 Feb 2005

PostPosted: Thu Dec 20, 2007 7:36 pm    Post subject: I'll say it again. Reply with quote

Ask your employer for statements of your pay that show exactly how much you're paid and how much is being deducted. You should have deductions for tax, pension, and medical insurance. Sometimes the school automatically deducts the money for your lunch as well.

The tax deducted is on a sliding scale and you can check it at the NTS website.
Your portion of the pension is 4.5%.
The medical insurance is about 2.2%.

Once you have your paystubs, read this thread again and follow the links to the 2007 calculator and easy guide for foreigners. Its REALLY easy. Just plug your numbers in the calculator and click the button at the bottom. It will tell you exactly how much you should expect to get back when your employer calculates your year end tax settlement next month (January). That amount should be added to your first paycheck in 2008. If it isn't, ask them why not. The response should be, "We're so sorry about the error. The money will be in your account ~." If they give you any other response or a time frame that's too long, tell them you want it done right away or you will be filing a complaint with the NTS.

In the calculator, the only sections you will likely have to worry about are:
Salary: Put in your total salary.
30%: Click "yes"
Tax Prepaid: Enter the total amount of tax you prepaid
Insurance: Enter the total amount of medical insurance premiums you paid
Pension: Enter the total amount of pension you paid
Special deductions: Under "Moving," enter 1 for the 1 time you presumably moved during the year

You may have other deductions, but it sounds unlikely from the situation you have described. Click "Click for Calculation" at the bottom when you're done, and it will calculate your tax for you. If the final number is positive, you owe more tax. If it is negative, you are owed a refund.
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