Korean Job Discussion Forums

[cflames7]

So, I realized I will be paying around 3% taxes as a Canadian teaching English in Korea.

I am planning to work in Korea for 1 year.

Am I required to pay Canadian taxes as well? If not, what is the process to avoid paying Canadian taxes on my income earned abroad.

Thanks for the help.

[wesharris]

Long answer no.
Short answer no.
Then again, I'm not Canadian.
So I don't pay Canadian taxes.
Either.
_+_+
Wes

[Koveras]

I also want this cleared up. My understanding is that we should pay, but there's some loophole, so we don't have to. Can anyone give some specifics?

[The Gipkik]

It's all about assets back home, how much money you made the year before in Canada, bank accounts, etc. Basically, if you don't own any capital and you didn't make above poverty rate the year before, the government will completely ignore you. Having a bank account is okay. Having health insurance if fine too. Driver's license is fine. Trust me on this, I've been traveling the world since '97 and I've lived in Canada twice since then for more than 6 months each time. I've had my driver's license and my health insurance renewed in the interim. And my bro is an accountant. Don't worry about it. You're small fries.

[gangwonbound]

[E_athlete]

1st of all the 3% you are referring to is actually korean tax. Canadian income tax for you and I working as English teachers in korea would be more like...12% in addition to the 3% you already pay in korean tax.

Now I keep hearing 3% korean taxes but according to this website i found, taxes are really according to how much you make each month. If you make 2.1million won your tax is ￦ 25,810 or 1.22%. It really depends on your salary you are getting.

source: http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2#



The topic of tax evasion is really complex. The short answer is yes the Canadian government expects you to pay income taxes on your overseas earnings in Korea. However you can get around this.

You have to not possess any assets or dependents in Canada. I don't think you are supposed to declare non-residency or anything like that, the government is supposed to assume it I'm guessing.

My impression is you can just file income taxes as usual say that you made $0 income and explain that your parents were giving you money for support. The Canadian government doesn't know you are making money abroad since they do not receive a T4 slip.



correct me if im wrong on this.

=======================================

hey cflames are you going to korea soon or already there?

I'm a canadian as well and ill be going late july.

[cflames7]

Thanks for the replies everyone, appreciate the help.

A few points in my case:
-I won't have any ties to Canada (property, dependents, etc) other than a Canadian bank account.

I will be there for a year (September to August) so the work will actually cover 2 tax years.
-In the first year, I will have Canadian income and Canadian tuition to claim from January to April.
-In the second year, I will be going back to school, so I will have income and tuition to claim in Canada from September to December again.

I assume this doesn't affect anything, but it might?

[E_athlete]

i'll be starting in Iksan around the same time and going back to school around the exact same time lol.


what city will you be in ?

[cflames7]

Seoul.

not sure where yet.

[E_athlete]

I wanted to teach there too but getting a public spot was too competitive. I heard from my recruiter that you need a masters or a teaching degree unless you are alright with a hagwan job (im not sure if he was telling the truth or not). I thought long and hard and decided I wouldnt take a hagwan job even it meant living in seoul.

[egrog1717]

[chris_J2]

Normally, Public School vacancies are available all year round, with people coming & going all the time. But this year, with the global economic recession, many schools are insisting on under 40 years old, white, & female. (Forget about anti-discrimination legislation, you're not in Kansas any more, Toto!)

And some of the Government agencies like Epik and Smoe, are pandering to the demands of parents & schools.

It is not necessary/mandatory to have a Masters, Doctorate, or TESL quals. Any BA will suffice. Of course, your pay rate will be higher, if you have a Masters / Dr degree.

[hfrancis]

Thought I'd add some advice as I've been back and forth with Revenue Canada about this matter. From what I understand, most of the previous respondents are on the right track but not entirely clear in my opinion. Let me explain what I have found out up until now.

What it basically comes down to is residency as previousely mentioned but rather than make assumptions about my residency, I am filling out a document through Canada Revenue Agency so they can make a formal decision on the matter. See http://www.cra-arc.gc.ca/.

The form (NR73 Determination of Residency Status (Leaving Canada) can be found at http://www.cra-arc.gc.ca/E/pbg/tf/nr73/README.html

I have been in and out of Korea since 2003 and will be returning in August for my 5th turn. Partly due to misinformation and partly due to neglect I haven't filed for income tax since that time. It does get a little complicated and as one of the previous respondents mentioned, the CRA probably doesn't care much about "small fries" like most of us with little or no property, dependents or assets and very little ties to home, but for those who want to be sure, fill out the form and fax it to Ottawa. You may have to fill one out for every tax year you've been in Korea but I was informed to fill just one out for my first year in 2003 and wait for the results.

The form is full of questions about various ties to Canada but there are a couple that are more important than others. In fact, there are two that the CRA are unable to help me answer, so if someone out there knows, please fill me in. They are under the category "Statement of Residence" on pg. 2 .

1. "Are you, under a tax treaty with another country, considered resident in the other country and not resident in Canada?"

I know that we are under a tax treaty with Korea but are we considered Korean residents according to their Revenue Agency?

2. Are you subject to income tax in that country on your world income? (total income from inside and outside Canada)

For example, if I'm making money on an investment back home or in another country am I obligated to pay tax on that in Korea?

I was told by a CRA official that these 2 questions are critical and so if it's a "no" for both then I assume we are responsible for claiming our income from Korea. Not sure yet though.

In my case, I have been with a different employer every year and not all of them have provided tax and pay related documents which will really complicate matters even more, if the CRA determines I have been a Canadian resident and am responsible for paying back taxes.

[bobbybigfoot]

I didn't ask CRC for a formal decision as Canada has a self-assessment system. Let them audit me (slight chance). When I filed my income tax, I indicated the date I left Korea. I owe NO tax from that date forward, nor do I need to file income tax until I return to Canada and become a resident again.

Canada and Korea have a tax treaty.

My case is cut and dry because I have NO ties in Canada at the moment.

It's been one year since I filed. CRC accepted my status, then clawed back some GST credits I had received.

That's that, and I don't expect any problems.

[peppermint]