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fromtheuk
Joined: 31 Mar 2007
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 Posted: Sun May 13, 2007 9:30 am Post subject: Tax refund - Brits in particular |
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Dear Posters,
I am going to collect my passport this Wednesday from the Korean Embassy in London and I hope to fly out to Korea late next week.
As a U.K. citizen I know I am tax exempt for the first 2 years of employment in South Korea.
Recently, I wrote a letter to the tax people in the U.K. asking for a letter of residency to give to my employers in Korea, to be exempt from paying tax there.
They said that can take 6 weeks. I think it's been about 4 weeks.
Here's the question....
I read online this residency letter needs to be shown to the employer in Korea, in the first month of employment.
If I get that residency letter later than one month into the job, will there be any problem in gaining a tax exemption in Korea?
Sorry if this has been asked/answered before. |
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icicle
Joined: 09 Feb 2007
Location: Gyeonggi do Korea
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| Posted: Sun May 13, 2007 2:52 pm Post subject: |
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It is possible that not having the letter won't be a problem.
I had not given my Korean Public School any written confirmation of my Australian residence status because I would rather be treated as a non-resident by Australia because then I do not have to pay Australian Tax on my Korean income - but would pay just the Korean Tax. The Australian tax is a lot higher. It is not Korean tax law that does the 2 year exemption it is the tax agreeement between the home country and Korea that does it for several countries.
So it will be important to know that the Korean income is not tax-free. It will just be taxed in your home country rather than Korea.
Icicle |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Sun May 13, 2007 3:30 pm Post subject: Re: Tax refund - Brits in particular |
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| fromtheuk wrote: |
Dear Posters,
I am going to collect my passport this Wednesday from the Korean Embassy in London and I hope to fly out to Korea late next week.
As a U.K. citizen I know I am tax exempt for the first 2 years of employment in South Korea.
Recently, I wrote a letter to the tax people in the U.K. asking for a letter of residency to give to my employers in Korea, to be exempt from paying tax there.
They said that can take 6 weeks. I think it's been about 4 weeks.
Here's the question....
I read online this residency letter needs to be shown to the employer in Korea, in the first month of employment.
If I get that residency letter later than one month into the job, will there be any problem in gaining a tax exemption in Korea?
Sorry if this has been asked/answered before. |
You will ONLY be tax excempt IF you are working for a public school or a public university.
IF you are working at a hakwon you will NOT be tax exempt.
You can do the documentation anytime during your first month or two IF you are at a public school. No panic and no worry.
. |
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mrsquirrel
Joined: 13 Dec 2006
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| Posted: Sun May 13, 2007 3:36 pm Post subject: |
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I'm tax exempt as my PS after asking about it. Initially they thought it was only for Americans but after a couple of phone calls they found out that us colonists can have it as well.
Didn't need to show anything either. They said you are not going to be taxed for two years and that was that. |
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icicle
Joined: 09 Feb 2007
Location: Gyeonggi do Korea
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| Posted: Sun May 13, 2007 3:51 pm Post subject: |
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| mrsquirrel wrote: |
I'm tax exempt as my PS after asking about it. Initially they thought it was only for Americans but after a couple of phone calls they found out that us colonists can have it as well.
Didn't need to show anything either. They said you are not going to be taxed for two years and that was that. |
It is important to know that this only applies to Korean Tax. Australians will still be liable for the normal Australian tax including Medicare Levy on their overseas income unless they are approved as Non-Residents for the purpose of Australian Tax.
And if they are approved as non-residents for tax purposes then they will have to pay Korean Tax.
The grounds for non-residence are relatively stringent - and by no means automatic and unlikely to be approved if you are only planning on being away for a year or two.
I would personally rather pay Korean Tax.
In my previous life I did work for the Australian Tax Office and I did check the Australian-Korean Tax Agreement and the Australian Tax Act while trying to work out my situation. There are 3 grounds that you need to satisfy to be treated as a non-resident and not necessarily easy to satisfy.
Just be aware that you may be liable for tax in your own country.
Icicle
Icicle |
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SPINOZA
Joined: 10 Jun 2005
Location: $eoul
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Betty Rubble
Joined: 29 Apr 2007
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| Posted: Sun May 13, 2007 8:03 pm Post subject: |
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| I have been wondering about this too. I was told by my co-teacher that I can be tax exempt in Korea but I think that means I would have to pay taxes in America like Icicle said. I don't want to go through the trouble of getting my residency letter to be tax exempt in Korea, only to find out that I owe much more to America next year! |
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fromtheuk
Joined: 31 Mar 2007
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| Posted: Sun May 13, 2007 9:07 pm Post subject: |
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thank you for your help.
i've found out i'd have to pay tax on the income earned in S. Korea, in the U.K. instead.
what interests me is which is more, tax in Korea or the U.K.?
if there's not much of a difference, i don't mind. |
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SPINOZA
Joined: 10 Jun 2005
Location: $eoul
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| Posted: Sun May 13, 2007 10:14 pm Post subject: |
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| fromtheuk wrote: |
thank you for your help.
i've found out i'd have to pay tax on the income earned in S. Korea, in the U.K. instead.
what interests me is which is more, tax in Korea or the U.K.?
if there's not much of a difference, i don't mind. |
I don't fucking believe this. What about those of us who didn't get a residency cert but also did NOT pay tax? |
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SPINOZA
Joined: 10 Jun 2005
Location: $eoul
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| Posted: Mon May 14, 2007 5:09 pm Post subject: |
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| fromtheuk wrote: |
thank you for your help.
i've found out i'd have to pay tax on the income earned in S. Korea, in the U.K. instead.
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Where did you get this information?
(click the link from Inland Revenue above for tax rates/allowances in the UK. On an average 2 million-ish Korean salary, you'll pay approx 2%) |
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SPINOZA
Joined: 10 Jun 2005
Location: $eoul
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| Posted: Wed May 16, 2007 3:47 pm Post subject: |
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| ?????????????????????????????????????? |
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mrsquirrel
Joined: 13 Dec 2006
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| Posted: Wed May 16, 2007 3:57 pm Post subject: |
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| If you are out of the country for more than 180 days a year you don't pay tax |
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SPINOZA
Joined: 10 Jun 2005
Location: $eoul
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| Posted: Wed May 16, 2007 6:44 pm Post subject: |
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| mrsquirrel wrote: |
| If you are out of the country for more than 180 days a year you don't pay tax |
Fromtheuk, the OP, appears to have been told otherwise. |
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mrsquirrel
Joined: 13 Dec 2006
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| Posted: Wed May 16, 2007 7:50 pm Post subject: |
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http://www.hmrc.gov.uk/pdfs/ir20.htm#earned
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Basis of liability
5.1 If you are resident in the UK under the rules in Part I of this booklet, you will normally pay UK tax on all your earned income, wherever it arises. As well as earnings for employment, earned income includes items such as pensions and income from a trade, profession or vocation. You may, however, be entitled to a reduction in the UK tax you have to pay if you receive overseas earnings and spend long periods abroad (see paragraphs 5.9 - 5.10) or if you receive an overseas pension (see paragraph 5.11). In certain cases where you are resident but not ordinarily resident in the UK, or resident but not domiciled here, we will deal with your overseas income on the �remittance basis' (see paragraphs 5.9, 5.11 - 5.12).
5.2 If you are not resident in the UK, we will generally tax you on any UK pensions or on earnings from employment the duties of which are carried on in this country. Where your duties are carried on partly in the UK and partly abroad, an allocation, based on days worked in the UK and days worked abroad, will normally be made to ascertain the earnings for duties carried on in this country which are liable for UK tax. We will not tax you on earnings from an employment which is carried on wholly abroad (see paragraph 5.5). See paragraph 5.4 for the position if you become resident in the UK part way through a tax year and 5.9 regarding overseas earnings taxable on the remittance basis. In some cases you may make a claim under a double taxation agreement for exemption from UK tax on your UK pension, or on earnings arising in this country (see Chapter 9 and in particular paragraphs 9.3, 9.4 and 9.6).
We will tax you on the profits of a trade, profession or vocation which is not carried on wholly outside the UK.
5.3 The tables at the end of this Chapter show in more detail how your pensions, earnings from any office or employment or profits from a trade, profession or vocation will be taxed, depending on your residence status and the place where your duties are performed. You should ask your Tax Office if you need further information or advice about your own tax position (paragraph 7 of the Introduction).
Special rules apply in the case of Crown employees - see paragraph 2.14. |
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fromtheuk
Joined: 31 Mar 2007
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| Posted: Thu May 17, 2007 1:38 pm Post subject: |
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I apologize everybody, I'm a very slow learner.
Does this mean I will pay tax in S. Korea? If you are exempt from tax for the first 2 years of work in S. Korea, that means you pay no tax at all, anywhere? |
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