Korean Job Discussion Forums

[Ceel22]

Greetings All,

This question has probably been answered somewhere on 'dave's...' but I cant find it anywhere (from what I've seen, most of the threads seem to refer to America and Canada). I'd be really grateful if someone could, in plain English please (no pun intended!), tell me what forms need to be filled out (or letters sent?!) to qualify for double taxation relief as an English teacher working in SoKo.

Many thanks in advance.

[da_moler]

I'd like to know about this too. I heard it's possible to do, but I haven't known anyone who's actually done it.

[Ceel22]

[da_moler]

[Ceel22]

[UKsimon]

I think people get the term's mixed up.

Double taxation relief, doesn't mean you get no tax in two countries, it prevents you from getting taxed in two countries from the same income.

Fill out the forms and get taxed on everything you send back to the UK on the remittance basis or pay minimal tax here.

[olololox]

The agency I have gone with to apply to the EPIK program is asking me to fill out a certificate of residency to avoid being taxed in Korea.

From what I read on here, people say they'd rather pay tax in Korea and not over here in the UK when they come back. How can you be sure you will not be taxed when you come back? In all the online FAQ's I have been reading from the HMRC they seem adamant that as long as I remain a UK citizen, I will be taxed on my income - I have no choice which country gets to tax me!

If anyone out there can help, it'd be appreciated.
Am I best off...

- Getting a Certificate of Residency + filling in a P85.
OR
- Winging it and seeing how things are in Korea, risking being taxed twice.

[ttompatz]

[maryjanes]

I don't claim to know or understand the full rules but as a UK citizen who lived abroad for 7 years my advice would be to pay tax in the country in which you're working and living as it's invariably cheaper, and to not officially inform HMRC that this is what you're doing. Gaps in NI and PAYE are common and if you don't tell, they won't usually ask. You can officially inform them of periods of non-residence by filling in some forms but you'd probably need to then complete a self-assessment for each tax year and provide evidence of salary and tax payments whilst abroad (which can be tricky if you don't have paperwork). Luckily I do have all the paperwork so if they want to check on me they can and I should come out clean. Generally, they don't really care that you are or were earning peanuts abroad - they're much more interested in people who are laundering millions or earning millions and deliberately trying to avoid any tax payments whatsoever.

[southernman]

Getting a certificate of Residency is definitley the way to go. Because EPIK actually allows you a 2 year window in which you will not be taxed. In that, for your first 2 years in Korea (I think) its EPIK who pays your tax.

Saying that I'm in my 4th year here, 2nd contract with EPIK, 2 different schools. When I first started with EPIK I was asked for my Cerificate of Residency. I explained that I had already been in Korea for 2 years so it didn't apply to me and I didn't have one.

Now, almost halfway through my latest contract and I still haven't paid one cent in tax. I haven't got a clue as to why, but its all good

[valkerie]

I left the UK in June 2000 (for a year or two in Japan, haha) and at that time the tax people told me that so long as I spent an entire tax year out of the country I wasn't liable to pay anything on income earned abroad.

So if I had returned the following April or may I would have had to pay.

I got a full refund my first year in Korea (hagwon) and paid nothing in my year in public school (with no official paperwork asked for or completed.)

[Andyc24_uk]

The UK tax rules state that if you spend more than 90 days in a tax year out of the UK, you will be classed as 'not ordinarily resident' in the UK and therefore not eligible for UK tax. This covers pretty much anyone on a 1-year contract in Korea. You don't need to fill any forms in. (It may say you do on the HMRC website, but the reality is it's not necessary - they won't question it.)

You will (assuming your employer isn't scamming the tax man) pay Korean income tax, at a rate of around 4%. On an average ESL teaching salary, that comes to around W70,000 a month, or about �40.

Any money you transfer to your UK bank account will not be taxed. The UK government does not track remittances into UK bank accounts (it doesn't have the legal right to, except in specific money laundering and terrorism-related cases), so the UK tax office has no idea what money you have or haven't transferred home. You have no legal obligation to inform them of this.

If your recruiter/employer wants you to sign an agreement of residency, refuse (or better still, just ignore it unless they push the issue) - you are much better off paying the Korean tax rate.

(Also, from a logical standpoint, it makes more sense - Tax is used to provide services for the people living in a country. If you're not paying Korean tax, your life here is being subsidised, to some extent, by the Korean taxpayer, while your tax payments are funding services in the UK which you aren't benefiting from...)

[Whistleblower]

What about voluntary NI contributions. If you work abroad you still need to pay NI should you wish to get a pension upon retirement (that's if pensions are around in 40-50 years).

[Andyc24_uk]

[wotsit2004]

its better to pay korean tax than uk tax. to do this, fill out a P85, and then stay out of the UK for a minimum of one whole tax year (ie. from apr 2011 until apr 2012.) from apr 2012 onwards, as long as u dont spend more than half of the year in the uk, you wont be liable to pay uk tax.

if you come back to the uk before apr 2012, you will be liable to pay uk tax on your earnings from your time in korea. (however, the tax you paid in korea while be taken into account, so if 5% of your earnings were taken as tax in korea, and uk tax is 20%, you will be taxed 15% on your return to the uk.)

if you request a residency certificate from the uk, you are exempt from korean tax because the koreans expect you to pay uk tax. getting a uk residency certificate is in absolute conflict with filling out a P85, as filling out a P85 indicates that you will not be a UK resident for some time.