Korean Job Discussion Forums

nkdridah · Joined: 19 Jun 2009 Location: United States

For all of the non-Canadian expat English teachers out there: apparently (at least for SMOE and GEPIK), we have to bring some sort of documentation in now to prove that we are eligible for tax exemption. Last year, for GEPIK, I didn't have to do this; it was automatic. On Page 7, Article 13 #3 of the SMOE contract, it says that we need a "Residence Certificate" or "Application for Tax Exemption". Does anyone know what these things are, what they mean, and how to go about getting any one of them?

Thanks a bunch.

OculisOrbis · Joined: 17 Jul 2006

you generally also will have to submit that document before your first pay, otherwise they may make the tax deductions for the remainder of your time whether you want to or not.

its possible to get that money back at tax settlement time, but its more of a pain in the ass so try to get it sorted earlier.

Misera · Joined: 12 Oct 2008

Capo · Joined: 09 Sep 2007

i just told them i don't have to pay tax and they never charged me

smee18 · Joined: 24 Mar 2009 Location: Korea

For any Aussies: I called the ATO and if you do not pay tax to Korea you are required to pay tax on what you earned to Australia, and thus be taxed at a significantly higher rate than what you would pay here. If you do pay tax here you are not required to pay tax to Australia. So, I didn't provide my school with the residency certificate etc., I want to pay tax here.

Beeston27 · Joined: 03 Mar 2009

If you are from the UK, are you liable to pay UK tax while here?

If the answer is yes, but only if the hmrc know about you being here, I assume the application for certificate of residency gives the game away?

Geckoman · Joined: 07 Jun 2007

Here's an earlier thread about filing your taxes while abroad:

ATT AMERICANS!: FILE YOUR FEDERAL INCOME TAXES BY JUNE 15TH!
http://forums.eslcafe.com/korea/viewtopic.php?t=154390

allan of asia · Joined: 17 Mar 2009 Location: Here, there, everywhere

Basically if you're a brit, like me, its not really designed for us.

For two reasons - unlike America we have to pay tax somewhere...but luckily not file anything - what a pain in the ass that would be!
Its whats called a double taxation treaty only, where basically you are either a resident or a non-resident for uk tax purposes...

if you are a resident you are liable for the 20 odd % UK income tax on your earnings inc. what you earn in Korea...

if youre non-resident you dont have to pay - but obviously meaning they aren't gonna give you your residents cert - they just replied to me saying that they don't issue "such certificates" and if they do all it allows us is a deduction of the amount of Korean tax off our UK tax bill.

So basically, its nigh on impossible to get as a Brit - and i know id rather be paying 3% than 20%+. Gotta love good old blighty!

Same goes for pension - we cant get a refund...but it does count towards your NI contributions and pension entitlement years on your return, so at least you'll can get job seekers allowance when you get back lol!

Very Happy

Oh, and remember rocking the boat with the HMRC might also awake the dragon that is the Student Loans Company if you have ahem...lost touch...with them.

Beeston27 · Joined: 03 Mar 2009

Allen of Asia,
Thanks a lot for the info.
i know what you mean about the SLC. Dont rattle the HMRC cage, cos the SLC might come a callin' !!!
It happened in my last job while in the UK Sad

K-Dog · Joined: 14 Apr 2009 Location: SoKo

Still confused about this... In the notice sent with my EPIK contract it specifically states that we must have a Residency Certification (Official proof of residency) before attending the orientation.

Is this true for UK residents?
If so where does one obtain such certficate?

Or is it optional, depending on if we want to pay tax in Korea or the UK?

Personally I'd rather not have to deal with HMRC, and let SLC know I'm leaving.

Forgive me if I'm still asking stupid questions, but none of this tax exemption stuff makes any sense to me, even after searching through the forums.

OculisOrbis · Joined: 17 Jul 2006

Dont get stressed about getting the residency certificate if its causing you stress or youre paranoid about your government.

The monthly withholding on a salary of 2.2 million KRW is only 29090 KRW per month - as of right now that is the equivelant of 13.75 GBP.

With only the basic deductions, you will also likely get some of that back at tax settlement time (Feb.) because you were only earning for 4 of the 12 tax months in korea.

If you submit more than the basic deductions, i.e. cash receipts, supplemental insurance, credit card etc, you could end up paying almost nothing for the year like I did. In my case, I had about 710 000 KRW in tax withheld and received a 635 000 KRW refund - total tax paid was approx 75 000 KRW for the tax year of 2008.

That applies to almost exclusively to public school people and possibly you might have to get on them and verify it was done correctly, but it will get done.

For some uni's and almost every hagwon, you can pretty much forget about getting any tax contributions refunded - assuming your employer submitted anything in the first place..

You will likely have an amount that is higher than necessary deducted from your pay each month to cover your taxes, but if your if employer reports any income at all to the tax office, you can be relatively assured it is much less than you actual wage.

If they did submit anything at all to the tax office on your behalf, they will almost certainly pocket any refund money that is due to you.

True, everyone is required to pay this small amount and is due any refund for which they are eligible. However, employers dont like the government to know about their money and also hate giving any more to you than they can get away with, so if you kick up a stink to get your employer to play above board - you will be creating a lot of aggravation for yourself and possibly (likely) be cheated out of even more than what was originally due to you.

If more people accepted this little bit of aggravation and forced employers to stop cheating us and their own government, then future teachers would have to deal with less BS than we do currently.

SandyRay · Joined: 30 Mar 2009 Location: Soon to be Incheon

nizpaz · Joined: 09 Oct 2008 Location: Seoul, South Korea

I work at a PS and from day one they did not tax me. ABout 6 months into the contract they asked me for the residency cert. As I have no intention of contacting HMRC to obtain one (and I doubt I'm eligible considering I havent resided in the UK for 7 years) and given that makes me then required to pay 20pc to the UK, I told my school I wouldnt be able to get it, so just tax me in Korea. They told me that wasnt possible. So both parties just ignored the issue and here i am with no cert and not paying tax. I dont think it's a big deal to have the cert. I dont think paying Korean tax is a big deal either as other posters have said - it's minimal. The pension deduction on the other hand is annoying if you're a Brit.

GreenlightmeansGO · Joined: 11 Dec 2006 Location: Daegu

Hold on a minute...can I get my tax back? Is that what you're saying? I pay about 80 000 a month income tax, so it would be awesome to get that back. I work at a hagwon, BTW, and pay 3.5% on my income and housing allowance (which I should complain about, but haven't bothered).

It is possible that I have no idea what I'm talking about (I'm tired and skimmed through most of the posts).