Korean Job Discussion Forums

[TonyD]

JACL --u have been so full of crap since god knows when that no one would believe you if you were the only teacher in Korea.

You filled Pusanweb with your ridiculous religous diatribes and brainwashing, and now you are an expert on tax -

why don't you accept the fact that you are nothing but a teacher who likes the sound of his own arguments!

[Crowzone]

Well.

Despite the flame war -- some things to seem to stand true.

Just a few comments.

As far as housing being taxed. YOU Would be liable for the taxes IF the residence is somehow attached to your name. Meaning, the landlord has an agreement with YOU, but instead of you paying the rent, your school does.

WHY is this the case?

Because you have to think Logically.

This is an income tax.

In the above example, your school/boss/director/whatever cannot claim the residence as a deductable on their personal/business income tax because it is not in their name. Therefor, the money they are paying for the rent of your apartment is being TAXED as their regular income, and they rightfully expect you to pay the tax for them, since in YOUR personal taxes you are fully able to claim your residence (since it is in your name) as a deduction on your taxes.

Now, if YOU (The worker) are not a part of the agreement with the landlord: Your school/boss/whatever is the person named in the agreement with the landlord. Then Your boss can claim the rent paid to the landlord as a deduction on their taxes, and recoup any tax on their income as a result of this expense. In which case, they have NO BUSINESS WHATSOEVER passing the tax on to their employee, since at the end of the year, they would have both A) Your money, and B, they'd claim the rent of the apartment as a deduction on their own tax and get that money back as well -- ie, they'd have 2x the tax.

So, in other words, it depends ENTIRELY upon whether you are the one renting the place, or your landlord is renting the place, and letting you stay there free.


AS for airfare taxes.

Again, your boss can EASILY claim this as a legitimate business expence on his busienss income taxes. YOU, however, could not claim it on your taxes as a personal deduction.

[Crowzone]

In the end, no matter what you end up doing. I would suggest you ensure that your boss is Actually PAYING this tax, and that they are NOT claiming these expenses on their own income and business income taxes thus getting 2x the money or scamming you.

[jacl]

[the eye]

[Crowzone]

Thats my point however -- if they are claiming it as a business expence, then they're having it deducted from their income tax, and therefore they are recieving the money back in the form of a deduction on their tax. IE, you are not paying that tax because its being given back to them in the form of a deduction on their year end taxes.

If they are NOT claiming it as a deductible on their income tax (Because they cannot -- if the apartment is in your name that is) They then pay the rent, but do not take it out of your salary. In this case, at the end of the year, they can't say to the tax man -- well that money was used as rent for my business, and so the tax man counts it as part of THEIR taxable income -- in this scenario, the boss man turns around and expects the employee to pay the Tax that the bossman paid because he could not claim it on his taxes. However, the employee could claim it, and get this money back anyways.


Lets break this down with an example.

Scenario One

The apartment is in the schools name, and is no way affillitated with the employee.

(just making up these numbers as a demonstration)

School has a yearly income of 200m won a year
The school pays for its employee's apartment, lets say 12m won for the whole year (1m won a month)

Now, when the school files it's income taxes, it shows the government that it made 200m won, but it also says, well 12m of that won was spent on the legitimate busieness expense of housing employees.

Therefore that school now has only 188m won of taxable income (pretending it has no other deductions)

So they pay tax on the 188m won instead of the 200m won.

Scenario Two

The apartment is n the name of the employee, but the school is paying the rent.

In this case, the school makes 200m won yearly as total income
They pay the same 12m won per year in rent.

But they CANT use it as a deduction on their income tax because its not in the school's name.

So they are taxed on the entire 200m won

Therefore, they expect the employee to pay that extra tax money because it would be further expected that the employee would claim that 12m won on THEIR tax return and recieve the deduction that it warrants, thus recouping that tax.

Scenario Three

This is the underhanded scenario:
The school has the apartment in their name
They claim the 12m won deduction on their taxes

AND they have been also deducting money from your paycheck claiming it is for the income tax on your housing.

Then come tax return time, they have YOUR money from your paycheck PLUS the money from the government that they didn't have to pay (the tax on that 12m won of their own income they explained away as a busieness expense)

------------------------

[Crowzone]

[the eye]

Crowzone,

Thanks for adding some intelligence to the discussion. What is your take on any benefit to an employer who has registered a chain of schools as a corporation.
Would it not be more beneficial for the corporation to claim the apartment as a 'salary' instead of claiming the rent as a deductible ?

Wouldn't such a trick reflect better on his tax statement?