Korean Job Discussion Forums

[Eedoryeong]

Hi

I'm looking for some solid guidance on the issue of whether or not to pay Canadian taxes and how if required. There seems to be no consensus from one CRA rep to another on what to do. One will say you don't claim if you're not a resident and that if you're out of the country for the year you don't have to file. A friend's accountant told her she can say that she's 'traveling'. Another CRA rep said that residency has to be determined. Yet another accountant says the three-year mark is the non-residency point at which you don't have to file global income. A lot of fellow newbs are saying they're not going to file and feign ignorance. Sounds dangerous to me, in that bite-you-in-the-arse-later kind of way.

Hmm, as I write this it seems to me that I should contact the Consulate.

However, I think I would prefer to solicit the opinions of those Canadians having worked here long-term who have successfully managed to minimize the taxes they pay, assuming they have retained citizenship and plan to return someday.

At the moment Revenue Canada is advising me to simply request a Statement Of Global Income from the Korean tax office when my first year's salary is done. They've also pointed out the article of the Korean-Canadian tax treaty that will allow foreign tax paid to be deductible from the tax payable at home.

Veterans here I've met are telling me about all kinds of wizardry their home tax accountants are doing. I thought I had this cased before I came over but now that I'm here it looks murkier.

Someone with some real experience please bring some Windex to this issue.

[polonius]

My Wife and I have both filed the non-residency form. Found here: http://www.cra-arc.gc.ca/E/pbg/tf/nr73/nr73-07e.pdf

We have been declared non-residents. However, this is simply an opinion held by someone in a governmental position, and could be altered when filing if the taxman wants. None the less, it is among one of the first steps you should take if you are planning on being overseas for more than one year.

I haven't been home to deal with taxes in 6 years, nor have I received nasty letters from Revenue Canada.

If you are only out one year, I would claim to Revenue, that you were travelling. If it is more than that, fill out this form.

I don't know if I am going to be whacked with a big tax bill when I get home, but I will fight it tooth and nail if they try.

Sorry I can't give more info, but that is all I have.

[Nerual]

There's some good information here:

http://forums.eslcafe.com/korea/viewtopic.php?t=1698

[peppermint]

Lived in Korea two years, back in Canada for nearly 2, and currently work for Revenue Canada, though I don't deal with international taxes etc.

I didn't file for the 4 years I was abroad, and when I got back to Canada, I filed the NR-74 form ( to re-establish residency) I got a letter back from the International tax office requesting that I fill out the NR-73 (letting them know I was leaving ) retroactively.

I mentioned everything I could think of on these forms to show that I was living, not just visiting Korea. I mentioned stuff like bank accounts, internet and phone service contracts, KOTESOL membership, my possessions, a pet fish I had for a while, you get the idea.

I got a letter back from the office dealing with international taxes, saying that, in their opinion, I'd been a non resident from the date I left until the date I told them I'd returned. When I filed my taxes last year, I got a substantial refund, although I'd been in Korea for a good part of 2006.

Lots of people I knew didn't file when they were abroad, and from what I understand, in most cases, it wasn't a problem The flip side of that though, if you did get caught, and they determined that you owed money- it wouldn't be good. The penalties for late payment are quite steep and compounded monthly.

Oh, and for those who've filled out the form- I've never heard of someone being declared a resident after the fact, and I think the ambiguity in the statement is just something to cover themselves, if the facts of residency don't match up with what was mentioned on the application.