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wotsit2004
Joined: 17 Sep 2010
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 Posted: Fri Nov 12, 2010 1:30 pm Post subject: if exempt from tax in korea, do u still pay in home country? |
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i have heard that if you get a residence certificate before going to korea, you can apply to be exempt from korean tax. if you do this, does this mean that you still have to pay tax in your local country?
im from the uk, and i think tax here is higher than in korea.
thanks |
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crossmr
Joined: 22 Nov 2008
Location: Hwayangdong, Seoul
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| Posted: Fri Nov 12, 2010 3:18 pm Post subject: |
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It depends on the tax treaty. The Canadian one for example isn't word well and on it's face seems like you wouldn't, but in actuality, as a couple others have informed me, you are responsible for taxes in Canada beyond what you'd pay in Korea.
So if your tax rate in Korea is 5% and based on income your tax rate in canada is 10% you'd be responsible for the 5% difference.
Luckily the average teacher starting salary of 2.3 million puts you in a pretty low tax bracket in Canada.
I'm sure another UKer can be more specific |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Fri Nov 12, 2010 5:32 pm Post subject: Re: if exempt from tax in korea, do u still pay in home coun |
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| wotsit2004 wrote: |
i have heard that if you get a residence certificate before going to korea, you can apply to be exempt from korean tax. if you do this, does this mean that you still have to pay tax in your local country?
im from the uk, and i think tax here is higher than in korea.
thanks |
yes and no.
IF you have the certificate you are exempt from paying Korean tax for the first 2 years BUT:
a) you must be working for a public school or publicly funded university.
b) you are still taxable in your home country.
The good news is that while you are taxable in your home country, MOST countries have a taxable income deduction for your foreign earned income (basically the first big portion of your FOREIGN earned income is tax exempt).
The amount varies by country and from year to year. I am not sure about the UK this year (haven't looked) but in the US (last year) for example, the first $88,000 of foreign earned income is tax exempt.
Another thing to note here:
Although the certificate says you are taxable and considered resident in the UK it does NOT tell the UK tax office:
a) that you are working,
b) where you are working,
c) if you are working or
d) if you make any money.
There is NO tax reporting between Korea and the UK so in effect, the tax office won't know (and has no way to check) if you have been
a) working abroad or
b) took an extended backpacker holiday for a year or 2.
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wotsit2004
Joined: 17 Sep 2010
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| Posted: Wed Nov 17, 2010 1:11 pm Post subject: Re: if exempt from tax in korea, do u still pay in home coun |
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| ttompatz wrote: |
| wotsit2004 wrote: |
i have heard that if you get a residence certificate before going to korea, you can apply to be exempt from korean tax. if you do this, does this mean that you still have to pay tax in your local country?
im from the uk, and i think tax here is higher than in korea.
thanks |
yes and no.
IF you have the certificate you are exempt from paying Korean tax for the first 2 years BUT:
a) you must be working for a public school or publicly funded university.
b) you are still taxable in your home country.
The good news is that while you are taxable in your home country, MOST countries have a taxable income deduction for your foreign earned income (basically the first big portion of your FOREIGN earned income is tax exempt).
The amount varies by country and from year to year. I am not sure about the UK this year (haven't looked) but in the US (last year) for example, the first $88,000 of foreign earned income is tax exempt.
Another thing to note here:
Although the certificate says you are taxable and considered resident in the UK it does NOT tell the UK tax office:
a) that you are working,
b) where you are working,
c) if you are working or
d) if you make any money.
There is NO tax reporting between Korea and the UK so in effect, the tax office won't know (and has no way to check) if you have been
a) working abroad or
b) took an extended backpacker holiday for a year or 2.
. |
thank you for your response. however, wouldn't what you described be considered tax evasion? |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Wed Nov 17, 2010 4:11 pm Post subject: Re: if exempt from tax in korea, do u still pay in home coun |
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| wotsit2004 wrote: |
| ttompatz wrote: |
| wotsit2004 wrote: |
i have heard that if you get a residence certificate before going to korea, you can apply to be exempt from korean tax. if you do this, does this mean that you still have to pay tax in your local country?
im from the uk, and i think tax here is higher than in korea.
thanks |
yes and no.
IF you have the certificate you are exempt from paying Korean tax for the first 2 years BUT:
a) you must be working for a public school or publicly funded university.
b) you are still taxable in your home country.
The good news is that while you are taxable in your home country, MOST countries have a taxable income deduction for your foreign earned income (basically the first big portion of your FOREIGN earned income is tax exempt).
The amount varies by country and from year to year. I am not sure about the UK this year (haven't looked) but in the US (last year) for example, the first $88,000 of foreign earned income is tax exempt.
Another thing to note here:
Although the certificate says you are taxable and considered resident in the UK it does NOT tell the UK tax office:
a) that you are working,
b) where you are working,
c) if you are working or
d) if you make any money.
There is NO tax reporting between Korea and the UK so in effect, the tax office won't know (and has no way to check) if you have been
a) working abroad or
b) took an extended backpacker holiday for a year or 2.
. |
thank you for your response. however, wouldn't what you described be considered tax evasion? |
IF you file and make use of the legal tax exemptions then no, that is tax avoidance and is perfectly legal. That is why they have tax exemptions / income deductions.
If you are talking about NOT declaring your tax and NOT filing then it is simply "not filing" - an administrative penalty for the nature of what we are talking about - if they complain.
IF you FILE a FALSE claim (as in on holiday with no income when you were in fact working) it is tax evasion and is illegal.
The other option is to be considered resident in Korea, pay your 1.6% of your income to the Korean tax man and not worry about it.
. |
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