Korean Job Discussion Forums

[wotsit2004]

hi

im really confused about the tax exemption that can be claimed by public school teachers. im from the uk, and like many other countries, the uk has a double taxation agreement with korea. i thought this meant that i would not have to pay tax to both countries, but i would have to pay tax to one of the countries. so i thought that if i submit a uk residence certificate, i am liable to paying uk taxes. (american citizens do not have to pay tax when working abroad as long as they earn less than $90000 or so, but i dont think theres a rule like that for british citizens. this means that when american citizens submit a US residence certificate, they may be liable to US taxes, but just dont pay any because theyre not earning more than ~$90000. so it could be different for americans.)

when i checked the UK-korea double taxation agreement online, it said:

Subject to paragraph (2) of this Article, an individual who visits one of the Contracting States for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college, school or other similar educational institution which is recognised as non-profit seeking by the Government of that Contracting State, and who immediately before that visit was a resident of the other Contracting State, shall be taxable only in that other State on any remuneration for such teaching or research for a period not exceeding two years from the date he first visits that State for such purpose.

this looks like i have to pay uk taxes if im exempt from korean taxes. (and uk tax is much higher than korean tax.)

HOWEVER.. when i called the korean national tax service, they told me i would be exempt from paying uk and korean tax, and that if a korean comes to the uk to work in education, theyll also be exempt from both uk and korean tax.if i declare myself a non-resident of the uk, i dont think i will be liable to uk taxes if im out of the country for a full tax year. the korean national tax service advisor told me that the residence certificate just proves that i have been a resident of the uk - not that i still am a resident; and that it whats important; and thats why im not liable to uk tax.

so this seems to be contradictory to what i read in the double taxation agreement. i dont want to be exempt from korean tax if it means i will have to pay uk tax, so im not sure whether or not i should hand in a uk residence certificate to become exempt from korean tax.

can anyone help explain this to me?

thank you

[nathanrutledge]

You pay taxes in one country or the other, not both. If you're working for a school, you don't have to pay taxes for two years. That's it. So, you pay Korean taxes, and not UK, but you get an exemption, so you pay nothing. EOS.

[hanams]

Does that mean that there will be no deductions at the end of every month (of withheld tax)? Or do we get a tax return at the end of the year?

[isitts]

[isitts]

[hanams]

The tax rate at home is 29%, so I'm better off not handing in the certificate and getting taxed in Korea...

I've heard that there is a threshold for US citizens which entitle them to a tax exemption if they make less than the threshold.

Does anyone know if there is a similar protocol for Australians? I've looked on the tax office site and couldn't find anything, but hoping someone else knows some new information...

[isitts]

[hanams]

Thanks for that!

Australia does have a double tax treaty with Korea so we only have to pay in one country.

Just not too sure about the the threshold for tax exemption...