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Are Canadians really taxed higher than Americans in Korea?

 
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jack_daniels



Joined: 01 Feb 2003

PostPosted: Thu Feb 06, 2003 4:36 am    Post subject: Are Canadians really taxed higher than Americans in Korea? Reply with quote

My university (which will go unnamed) just pulled 2 million won out of my salary and said it was for a tax that all Canadians must pay in Korea. (Apparently this tax was supposed to have been paid the whole time I was here (1.5 years), but it wasn't and so they are taking it out now.) The Americans at the university were not taxed unless they had taught here over two years. The other Canadians here were taxed about half of what I got taxed. My Korean wife phoned the tax office and they said a law has been on the books since 1998 that Canadians have to pay 18% tax in Korea as soon as they start working in Korea. Americans have no pay no tax, he said, until they have worked two years in Korea.

Maybe this law exists, I don't know. But I haven't heard of such a law being applied retroactively to people at other universities. Moreover, my tax is supposed to now be 18% from next month. This all sounds suspicious and our coordinator (who is Korean of course) just said it is an "administrative problem" common in Korea and something like this happened to him once so I have to live with it. No warning was given to me about the tax -- it was just taken from my paycheck suddenly. The other foreigners here got off easier than I did, so they aren't doing anything to rock the boat.

Anyway, what I want to know is, is there really such a tax law for Canadians on the books? Is it being applied at all universities in Korea? Can they apply it retroactively without warning like they did to me? Or is my university just making this up and someone is lining their pockets or has a grievance against me?

As I understand it, the standard tax is about 5%. This 18% thing was a shock and just cannot be true.

If I am being ripped off, do I have any recourse? Or do I just have to take this shit?

Thanks in advance.
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Stunted Wookie



Joined: 06 Feb 2003
Location: Sound Studio

PostPosted: Thu Feb 06, 2003 6:25 am    Post subject: 5%..Where is the %? Reply with quote

Hey Jack...
Check that out agian...My wife called the tax office today too, a person making 2 million won a month should pay 40,670won a month tax. I read the national tax website: http://www.nts.go.kr/New_english/index.htm and it said

If you are an alien resident for the entire year, you should file a final tax return in the same way as a Korean resident.
(if your employer files for you you do not need to file...have your boss SHOW you the original form that verifies you have been taxed and payment was received from the tax office)

There is a global base tax rate on 10mil-40mil of 0.9million won +18% of the amount exceding 10 million won.
Maybe this is where they are getting the 18% from?
Remember this is global tax, not just Korean tax.....You can also get a credit for any payments made or to be made to Canada...if you are doing that.

Your employer has to provide you with your tax certificate, as when you leave all tax matters have to be settled. You could get a refund or have to pay more. The main # is 02-397-1592 to find out more info.

The 18% could come from Pension and other add ons...but Pension you get back anyhow so its ok.

But even after re-reading your and my post..I think you are getting ripped off.
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jack_daniels



Joined: 01 Feb 2003

PostPosted: Thu Feb 06, 2003 6:52 am    Post subject: Still Not Clear Reply with quote

Thanks for the reply. Maybe there is some kind of law on the books with this 18%, but I have been here nearly 7 years and no tax was suddenly applied retroactively like this before and I have never paid anywhere near 18% at the two other Korean universities I worked at before. The only law with 18% that I recall seeing was for short-term workers (C-4 visa), but even with such people employers have a way of getting around this law.

Has anyone else out there suddenly been slapped with a retroactive tax that supposedly Canadians pay but Americans don't and then been told to expect 18% in deductions? I would have expected to have heard about it on this board before. Anyway, if this 18% tax goes into effect it sure won't be worthwhile for me to stay on in Korea. Money is the only reason I'm here. There's certainly little else redeeming about this place.
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IconsFanatic



Joined: 19 Jan 2003

PostPosted: Thu Feb 06, 2003 9:15 am    Post subject: Reply with quote

Procure Canadian non-resident status, and you're back to paying your 5% Korean tax.
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