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Kimchifart
Joined: 15 Sep 2010
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 Posted: Fri Jan 07, 2011 4:37 am Post subject: Has anyoone else heard about the tax rise for foreigners? |
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I read something a while ago about it going up to 12 or 13 percent. I thought nothing of it, but a friend came to me saying it's going up to 12%.
Any truth to this or BS? |
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whitestboyalive
Joined: 09 Dec 2010
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| Posted: Sat Jan 15, 2011 2:40 am Post subject: Re: Has anyoone else heard about the tax rise for foreigners |
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| Kimchifart wrote: |
I read something a while ago about it going up to 12 or 13 percent. I thought nothing of it, but a friend came to me saying it's going up to 12%.
Any truth to this or BS? |
I think so, but dunno about your numbers there. Apparently it works out to a 1.5 million won deduction on my Feb paycheck!!!  |
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caribmon
Joined: 26 Oct 2009
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| Posted: Sun Jan 16, 2011 3:55 am Post subject: |
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This is what I got from the 2010 tax guide for foreigners. Yes you pay about 1.3 in tax, but you already paid most of it.
If you make 29.9 million won per year (2.3/month), you will pay about 1.23 mil in tax for the 2010 year. They changed one exemption so the rate is a little higher.
The calculation is like this:
Gross income = 29.9 m
Deduction for wages = 11.235 m
Personal deduction = 1.5 m
Pension deduction = 750k
Special deduction = 1m
Net taxable income = 15,415,000won
Tax = 6%*(12,000,000) = 720,000 won
15%*(3,415,000) = 512,250
TOTAL TAX FOR 2010 = 1,232,250 won
Tax alread deduced from paycheques (3.3%) = 986k
Total due upon filing: 246,000 won |
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isitts
Joined: 25 Dec 2008
Location: Korea
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isitts
Joined: 25 Dec 2008
Location: Korea
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| Posted: Sun Jan 16, 2011 6:10 am Post subject: Re: Has anyoone else heard about the tax rise for foreigners |
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| whitestboyalive wrote: |
| Kimchifart wrote: |
I read something a while ago about it going up to 12 or 13 percent. I thought nothing of it, but a friend came to me saying it's going up to 12%.
Any truth to this or BS? |
I think so, but dunno about your numbers there. Apparently it works out to a 1.5 million won deduction on my Feb paycheck!!! |
Why did you have it all deducted at once? You're school didn't deduct monthly? |
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Epik_Teacher
Joined: 28 Apr 2010
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| Posted: Sun Jan 16, 2011 7:09 am Post subject: |
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| I'm not sure why, but they deducted around W500k from my last paycheck. I didn't have a chance to ask the bean counter what was going on. Probably something to do with that. More and more BS in Korea by the week! |
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oldfatfarang
Joined: 19 May 2005
Location: On the road to somewhere.
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| Posted: Sun Jan 16, 2011 3:41 pm Post subject: |
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I seem to have missed this tax increase. Can anyone supply more detail please.
I don't pay tax at my public school. As a 'new hire", I'm exempt (as the K govt. pays my tax for first 2 years) (I think).
Does this tax increase (???) still apply to me?
If so, I'll be really angry if they deduct it all in my feb pay check- because I'm leaving in Feb - this would cut my severance pay.
Any info appreciated.
Good luck. |
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nathanrutledge
Joined: 01 May 2008
Location: Marakesh
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| Posted: Sun Jan 16, 2011 6:22 pm Post subject: |
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Isitts link is excellent.
The tax change is thus:
Before, a person could:
A) pay regular Korean taxes
B) pay regular Korean taxes on 70% of their income
C) pay a flat 15% tax on all income.
Koreans did A, foreigners did B or C. B is great if you make little money (ESL teacher) and C is great if you're a CEO or engineer, or something with a lot of income.
The government axed option B. So now, foreigners must either pay the regular Korean tax on 100% of their income or they pay 15% on everything.
Because the tax rate is between 1.5% and 2%, we're talking another 100k won per year, if that. Use the link he provided, check it out. I did mine and found out that this year I'll be liable for about 600k (which concerns me, because apparently my school is only deducting about half of that - which is less than they should be deducting even under the old system!  )
Either way, it's not the end of the world. People are always complaining about how racist and xenophobic society is here - now here is your chance to be a part of Korean society!  |
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oldfatfarang
Joined: 19 May 2005
Location: On the road to somewhere.
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| Posted: Sun Jan 16, 2011 6:33 pm Post subject: |
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| nathanrutledge wrote: |
Isitts link is excellent.
The tax change is thus:
Before, a person could:
A) pay regular Korean taxes
B) pay regular Korean taxes on 70% of their income
C) pay a flat 15% tax on all income.
Koreans did A, foreigners did B or C. B is great if you make little money (ESL teacher) and C is great if you're a CEO or engineer, or something with a lot of income.
The government axed option B. So now, foreigners must either pay the regular Korean tax on 100% of their income or they pay 15% on everything.
Because the tax rate is between 1.5% and 2%, we're talking another 100k won per year, if that. Use the link he provided, check it out. I did mine and found out that this year I'll be liable for about 600k (which concerns me, because apparently my school is only deducting about half of that - which is less than they should be deducting even under the old system! )
Either way, it's not the end of the world. People are always complaining about how racist and xenophobic society is here - now here is your chance to be a part of Korean society! |
Thanks for the excellent info.
However, I still need to know if this tax change applies to public school teachers (who are/used to be tax exempt for the first 2 years).
Traditionally, only hagwon English teachers paid tax in Korea, whereas public school teachers had to pay tax in year 3 and after.
Any info appreciated.
Good luck. |
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nathanrutledge
Joined: 01 May 2008
Location: Marakesh
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| Posted: Sun Jan 16, 2011 6:41 pm Post subject: |
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| AFAIK, IF you supply the documents from your home tax agency, the exemption still applies. I have not read of any changes in that. |
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oldfatfarang
Joined: 19 May 2005
Location: On the road to somewhere.
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| Posted: Sun Jan 16, 2011 7:25 pm Post subject: |
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| nathanrutledge wrote: |
| AFAIK, IF you supply the documents from your home tax agency, the exemption still applies. I have not read of any changes in that. |
Thank goodness. The PS tax exemption (for 2 years) has always been one of the perks of teaching PS (not many left these days). I'd have hated to have my final pay (and severance) slashed by increased taxes.
Good luck. |
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isitts
Joined: 25 Dec 2008
Location: Korea
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| Posted: Sun Jan 16, 2011 8:38 pm Post subject: |
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| oldfatfarang wrote: |
| nathanrutledge wrote: |
Isitts link is excellent.
The tax change is thus:
Before, a person could:
A) pay regular Korean taxes
B) pay regular Korean taxes on 70% of their income
C) pay a flat 15% tax on all income.
Koreans did A, foreigners did B or C. B is great if you make little money (ESL teacher) and C is great if you're a CEO or engineer, or something with a lot of income.
The government axed option B. So now, foreigners must either pay the regular Korean tax on 100% of their income or they pay 15% on everything.
Because the tax rate is between 1.5% and 2%, we're talking another 100k won per year, if that. Use the link he provided, check it out. I did mine and found out that this year I'll be liable for about 600k (which concerns me, because apparently my school is only deducting about half of that - which is less than they should be deducting even under the old system! )
Either way, it's not the end of the world. People are always complaining about how racist and xenophobic society is here - now here is your chance to be a part of Korean society! |
Thanks for the excellent info.
However, I still need to know if this tax change applies to public school teachers (who are/used to be tax exempt for the first 2 years).
Traditionally, only hagwon English teachers paid tax in Korea, whereas public school teachers had to pay tax in year 3 and after.
Any info appreciated.
Good luck. |
Check out this thread. It's a sticky.
http://forums.eslcafe.com/korea/viewtopic.php?t=185469
You are tax exempt for your first two years (although, it depends what country your from). But this link shows you a loophole to be tax exempt from both Korea and US (asuming you are from the US.) |
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Skyblue
Joined: 02 Mar 2007
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| Posted: Mon Jan 24, 2011 8:11 pm Post subject: |
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What happens if
1) I didn't work for the first 6 months of the year, but I'm paid on the 17th, so I was only paid 5.5 months for 2010? Do I calculate it as 6 months, or as 5.5 months' wages? (Does anyone think the 15% flat rate will be less advantageous given this situation?)
2) I get a certain amount deducted every month, but I don't know how much is going to pension/insurance/taxes. So how can I figure out my non-15% flat rate for comparison purposes?
3) For that matter, how can I figure out how much I'm owing given the amount I've already paid and the 15% flat rate?
Can someone sort of describe step-by-step how we're supposed to figure out what we're supposed to pay/owe here? |
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schwa
Joined: 18 Jan 2003
Location: Yap
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| Posted: Mon Jan 24, 2011 8:30 pm Post subject: |
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| oldfatfarang wrote: |
| nathanrutledge wrote: |
| AFAIK, IF you supply the documents from your home tax agency, the exemption still applies. I have not read of any changes in that. |
Thank goodness. The PS tax exemption (for 2 years) has always been one of the perks of teaching PS (not many left these days). I'd have hated to have my final pay (and severance) slashed by increased taxes.
Good luck. |
AFAIK, the clock starts ticking on the 2-year exemption when you first start working in Korea (ie 2 years or more in a hagwon before switching to PS disqualifies you). |
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isitts
Joined: 25 Dec 2008
Location: Korea
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| Posted: Mon Jan 24, 2011 8:52 pm Post subject: |
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| Skyblue wrote: |
What happens if
1) I didn't work for the first 6 months of the year, but I'm paid on the 17th, so I was only paid 5.5 months for 2010? Do I calculate it as 6 months, or as 5.5 months' wages? (Does anyone think the 15% flat rate will be less advantageous given this situation?)
2) I get a certain amount deducted every month, but I don't know how much is going to pension/insurance/taxes. So how can I figure out my non-15% flat rate for comparison purposes?
3) For that matter, how can I figure out how much I'm owing given the amount I've already paid and the 15% flat rate?
Can someone sort of describe step-by-step how we're supposed to figure out what we're supposed to pay/owe here? |
15% is always less advantageous than 3.3%. Don't choose the flat tax option.
Also, if the school is deducting tax from your paycheck, then ask them to help you with your taxes. The website is helpful but you don't have to do it all yourself.
But even if you did, the school gives you a year-end statment of your salary and expenses taken out. If they don't (or didn't) then ask for it. You need it anyway to declare to your home country what you made. |
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