Korean Job Discussion Forums

[Trevor]

Someone told me that I could fill out a form and get ALL of my taxes back from the year I have worked here. I went to the tax office. They knew nothing.

Anybody?

[spliff]

Ask your boss and watch him sweat and attempt to BS you if he hasn't been or hadn't the intention of actually submitting your tax donations to the K-IRS.... And, don't forget to get receipts for all your pay stating your tax deductions. Again, tell your boss you need it for your tax purposes.. Actually, I believe the first two years here for US citizens are K-tax free...so you shouldn't have paid any tax or, if you have, you should get it back in it's entirety.

[Trevor]

I have the form from my boss and my school has been paying what they are supposed to pay.

Bumping the thread for anyone who knows what form I need and how do I get it. (tax office doesn't know).

Thanks.

[mediano tzu]

Ooh. I just had to ask about this before I came to this thread lower in the page. Yes, if anyone knows, do tell.

[SunnyD]

National Tax Service

Go here and click on publications. Then look at the "Easy Guide..." and "An Income Tax Guide for Foreign English Teachers." The second document is even translated word-for-word in both Korean and English, so it's a helpful one to show the boss.

It looks to me like Americans are exempt from tax the first two years, IF they work for a uni or public school. Hagwans don't qualify for the free tax. Not sure about private schools. It's only good for the first two years, provided it's a contract that's 2 years or less. Not sure if you can leave and come back on a new contract and qualify for another 2 years free (wouldn't that be nice?) Anyway, I'm guessing the tax is still withheld, and then refunded to those who file a return and qualify for all of it back. There's also info about other nationalities, so maybe there's more people who qualify for this free tax dealieo.

The tax return forms are included, in English. I haven't really looked at them yet.

sunnyd

[Trevor]

SunnyD,

Thanks, that's helpful. It says that I am entitled to not paying any taxes, however, it does not say how I get them back. Nothing in either publication about a specific form. : (

[lastat06513]

The first 2 years are tax free, but Korean employers won't tell you that.
But get this, that period only applies to 2 actual years or consecutive years of work. If you;

1. Leave the country in the middle of a contract
2. Leave for more than 6 months
3. Stop working on an E2 visa for a certain amount of time before working again
4. If you move to a different province or even a different GU

The time period youdon't have to pay taxes starts over again from zero.

[lastat06513]

On-topic


There was only ONE time where I actual got a tax return.

[cubanlord]

To clarify a bit:

I just finished speaking to Sun-a from the tax office (02-397-1448).

Americans, If you were "invited" to Korea and have stayed at your present place of employment for 2 consecutive years, then yes, you are tax exempt and can apply for a full return. However, if you came here as an English teacher, it is considered that you came here; not "invited here". Thus, you are not tax exempt.

Furthermore, keep in mind that if you are a US citizen and do not pay tax in the foreign country you work in, then you MUST pay tax back in the US (frankly, I'd rather pay the Korean low tax than the US tax). If you do pay tax in Korea, then you are exempt from paying US tax up to $80,000USD per year per person.

As for other nationalities, I do not know as I am an American. I hope this helps clarify any hear-say.

[sjk1128]

I'm a US citizen who worked for a Korean public school last year. I found the info you guys posted enormously helpful - so thanks. However, the link to the document regarding foreign English teachers in public schools was no longer readily available. Here it is (for anyone else looking for the same info). Now let me go argue with my school....

http://www.nts.go.kr/front/service/publish_book/valgan_book_view.asp?news_seq=5808

[happygirl]

OK. After reading the guide I've established the following:

I qualify for tax exemption.
My employer has been withholding taxes.

Can I get a refund on the taxes that have already been withheld? If I can get the uni to file the paperwork, will they stop withholding?

I can comprehend complicated scientific papers, but "tax speak" complicated by Korean to English translation confounds the hell out of me.

[sjk1128]

Happygirl,

That's what I'm going to argue with my school about. they haven't processed my taxes yet. Look at pp. 41-44 of the giuide. It basically says the employer should take out taxes every month. Then there should be a "Year End Tax Settlement" in January. If you should be exempt, as I should, that year end settlement would presumably involve a full refund (p.43, paragraph 2).

Good luck.

SJK

[rippa]

Wow - this information is so important, but rather difficult to get hold of...

The foreigner's 30% exemption off the top is a huge benefit - knocking down not only the total but also usually putting the worker into a lower percentage tax bracket.

30% exemption method under article 18-2 of the Restriction of Special Taxation Act 【Special Cases of Taxation for Foreign Workers】

조세특례제한법 제18조의 2【외국인근로자에 대한 과세특례】

① Foreign executives or employees(excluding laborers hired on daily basis ; hereinafter referred to the "foreign workers") shall be allowed an exemption from income tax on an amount equivalent to 30/100 of their labor incomes derived by performing their services in Korea.
② As regards income tax on labor income earned by foreign workers for their services performed in Korea, an amount computed by multiplying such labor income by 17/100 may, notwithstanding the provisions of Article 55 ① of the Income Tax Act, be adopted as the amount of such income tax. In this case, provisions concerning such tax exemption (including the case as provided in paragraph ①), deduction, reduction or exemption, and tax credit as relating to income tax under the Income Tax Act along with this Act shall not be applicable.

(what point 2 seems to mean is that top tax rate will be 17% even for those making huge amounts -- not me sadly)

① 외국인인 임원 또는 사용인(일용근로자를 제외하며, 이하 �외국인 근로자�라 한다)이 국내에서 근무
함으로써 지급받는 근로소득의 100분의 30에 상당하는 금액에 대하여는 소득세를 과세하지 아니한다.
(2003.12.30 개정)
② 외국인근로자가 국내에서 근무함으로써 소득세법 제55조 제1항의 규정에 불구하고 당해 근로소득에 100분의 17을 곱한 금액을 그 세액으로 할 수 있다. 이 경우 소득세법 및 이 법의 규정에 의한
소득세와 관련된 비과세(제1항의 경우를 포함한다)․공제․감면 및 세액공제에 관한 규정은 이를
적용하지 아니한다.(2003.12.30 개정)

(I don't know what the 2003-12-30 date at the end of the Korean translation means... can someone help? ...hopefully not that all this expires at the end of 2003...)

[happygirl]

[sjk1128]

But, rippa, assuming your tongue is not planted in your cheek, the excerpt you listed is from a sample 2005 tax calculation. The instructions at the top say to use 2006 codes when calculating your taxes for this year. The standard 30% reduction in taxable income for foreigners does still appear to apply from the reading I did while searching for this document - if your income is taxable at all.

The information about tax exempt status for many foreigners, however, is the most current available. The whole form was re-released in August 2006. (Check the bottom of Adobe p.2 - the Korean version of the preface.)

http://www.nts.go.kr/front/service/publish_book/valgan_book_view.asp?news_seq=5808