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legalquestions
Joined: 25 Mar 2007
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 Posted: Tue Apr 03, 2007 9:45 pm Post subject: I am American, so why is the uni witholding income taxes!!?? |
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As I recall, no Korean income tax was ever withheld by my previous employer (a university in Seoul) several years ago. I understand that this was due to a "reciprocal" tax treaty entered into by the Korean government and the American government some years previous.
Well, I'm back in Korea again (after an absence of several years), and I just received my first monthly paycheck from my "new" employer (a uni in the southern part of the country). The gross amount of pay was just over 3,500,000 won (the good news), but almost 200,000 won was withheld (the bad news) for national and local city taxes.
What gives? Has the aforementioned reciprocal tax treaty been rescinded/abolished by the respective governments? I know it is not a lot of money, but over a year it would be a pretty good chunk of change. |
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butlerian
Joined: 04 Sep 2006
Location: Korea
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| Posted: Tue Apr 03, 2007 9:51 pm Post subject: Re: I am American, so why is the uni witholding income taxes |
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| legalquestions wrote: |
As I recall, no Korean income tax was ever withheld by my previous employer (a university in Seoul) several years ago. I understand that this was due to a "reciprocal" tax treaty entered into by the Korean government and the American government some years previous.
Well, I'm back in Korea again (after an absence of several years), and I just received my first monthly paycheck from my "new" employer (a uni in the southern part of the country). The gross amount of pay was just over 3,500,000 won (the good news), but almost 200,000 won was withheld (the bad news) for national and local city taxes.
What gives? Has the aforementioned reciprocal tax treaty been rescinded/abolished by the respective governments? I know it is not a lot of money, but over a year it would be a pretty good chunk of change. |
From what I've heard, ELI's are entitled to two years tax-free, with the exception of Canadian teachers. |
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Colorado
Joined: 18 Jan 2006
Location: Public School with too much time on my hands.
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| Posted: Tue Apr 03, 2007 10:11 pm Post subject: |
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To recieve the Treaty exemption from Korean taxes you or your school must first apply for it. The application requires a statement from the IRS that you are a US resident for tax purposes. That statement now costs $35.
On the bright side, you can file a Korean tax return next year and get a refund.
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hogwonguy1979
Joined: 22 Dec 2003
Location: the racoon den
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| Posted: Wed Apr 04, 2007 1:49 am Post subject: |
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heck it should only be 35,000 won or so a month. the rest is pension (about 120k) and health insurance (about 50k) which are mandatory
may not be worth the hassle of all that for that amount |
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ShaneM
Joined: 03 Feb 2005
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| Posted: Fri Apr 06, 2007 4:50 pm Post subject: |
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| oops. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Fri Apr 06, 2007 6:50 pm Post subject: |
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| I don't understand this. Are you saying that American citizens working in Korea don't have to pay taxes for the first two years? I never heard that before. I just know you don't have to pay American taxes. |
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butlerian
Joined: 04 Sep 2006
Location: Korea
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| Posted: Fri Apr 06, 2007 7:11 pm Post subject: |
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| Adventurer wrote: |
| I don't understand this. Are you saying that American citizens working in Korea don't have to pay taxes for the first two years? I never heard that before. I just know you don't have to pay American taxes. |
Two years Korean income-tax exemption, at least in public schools anyway. |
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Hater Depot
Joined: 29 Mar 2005
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| Posted: Fri Apr 06, 2007 7:51 pm Post subject: |
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| butlerian wrote: |
| Adventurer wrote: |
| I don't understand this. Are you saying that American citizens working in Korea don't have to pay taxes for the first two years? I never heard that before. I just know you don't have to pay American taxes. |
Two years Korean income-tax exemption, at least in public schools anyway. |
That's my understanding too. I didn't pay tax at my public school. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Fri Apr 06, 2007 8:27 pm Post subject: |
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| Hater Depot wrote: |
| butlerian wrote: |
| Adventurer wrote: |
| I don't understand this. Are you saying that American citizens working in Korea don't have to pay taxes for the first two years? I never heard that before. I just know you don't have to pay American taxes. |
Two years Korean income-tax exemption, at least in public schools anyway. |
That's my understanding too. I didn't pay tax at my public school. |
I am not sure how I would handle not paying taxes since I am a dual citizen. I am not a resident of Canada, but I am a resident of the U.S. So I suppose I can stomach the 3.3% tax rate. I don't want to take some kind of risk by not paying the tax. |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Fri Apr 06, 2007 9:12 pm Post subject: |
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| Adventurer wrote: |
| I don't understand this. Are you saying that American citizens working in Korea don't have to pay taxes for the first two years? I never heard that before. I just know you don't have to pay American taxes. |
ALL E1/E2 teachers (with the EXCEPTION of Canadians) who are working in a public school or PUBLIC university can be exempted from paying korean income taxes for the 1st 2 years of their residency here.
E7, C-series, D-series and F-series visas do NOT enjoy this tax exemptiopn.
You must file and show a copy of your (I'll insert the IRS document number here when I find it again). I have it at work but not here at home.
You have to FILE your US taxes but you are also exempt from paying US tax on (I believe) the first $80k of your foreign earned salary. |
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mrsquirrel
Joined: 13 Dec 2006
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| Posted: Fri Apr 06, 2007 11:52 pm Post subject: |
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All foreigners in public schools are tax exempt for the first year. Other than Canadians.
I'm from the UK and had no problems getting that allowance. |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Sat Apr 07, 2007 12:41 am Post subject: |
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| mrsquirrel wrote: |
All foreigners in public schools are tax exempt for the first year. Other than Canadians.
I'm from the UK and had no problems getting that allowance. |
No....
ALL E1/E2 teachers (with the EXCEPTION of Canadians) who are working in a public school or PUBLIC university can be exempted from paying korean income taxes for the 1st 2 years of their residency here.
As a Brit I would expect you to have an E2 visa?
Americans will be asked to show the tax form from the IRS and on Monday when I get to work I will upload the specific information as it relates to them. |
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archer904
Joined: 04 Sep 2006
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| Posted: Sat Apr 07, 2007 1:18 am Post subject: |
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| Colorado wrote: |
To recieve the Treaty exemption from Korean taxes you or your school must first apply for it. The application requires a statement from the IRS that you are a US resident for tax purposes. That statement now costs $35.
On the bright side, you can file a Korean tax return next year and get a refund.
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Do you (or anyone else) know who to talk to in order to get the proper form to apply for this? |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Sat Apr 07, 2007 2:08 am Post subject: |
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So how would work for someone who is a dual citizen who has been out of Canada for years? I came on my U.S. passport? Should I just pay the taxes since I am also a Canadian citizen? I don't mind getting the money back. I have no assets in Canada, just liabilities i.e. the student loans.
I have a bank account in the U.S. and a few stocks. |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Sat Apr 07, 2007 2:16 am Post subject: |
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| Adventurer wrote: |
So how would work for someone who is a dual citizen who has been out of Canada for years? I came on my U.S. passport? Should I just pay the taxes since I am also a Canadian citizen? I don't mind getting the money back. I have no assets in Canada, just liabilities i.e. the student loans.
I have a bank account in the U.S. and a few stocks. |
Korea ONLY recognises the passport you entered on. If your visa is in your US passport then you have to follow the Korean rules as though you were ONLY a US citizen.
| archer904 wrote: |
Do you (or anyone else) know who to talk to in order to get the proper form to apply for this? |
If you can wait until Monday when I get to work I will post the specifics (I don't have them here at home). |
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