Korean Job Discussion Forums

Matman · Joined: 02 Jun 2006

I've searched the forum but haven't found a conclusive answer to this question. If you get a certificate saying you're resident in US, UK or wherever (UK for me) and so exempt from Korean income tax, you still have to pay tax in your own country, right? So why would you want to be exempt from the lower Korean taxes but have to pay the higher UK, US (or whatever) taxes? Wouldn't it be better to pay Korean income tax and be exempt from paying income tax back home?

DHC · Joined: 15 Jan 2003

US citizens must pay US tax even if you work overseas. This is in addition to paying Korean tax. As a US citizen you can qualify for as for an overseas tax exemption which will more than cover your income in Korea if you are teaching. You must qualify as an overseas resident (living overseas does not automatically make you an overseas resident for tax purposes) AND you must file a US tax return even if you don't pay any taxes. US law also requires that if you have a bank in another country which has $10,000 deposited during a tax year ($10,000 total accumulation in 1 year) then you must file a separate report with the US Treasury Dept. This is a different form than the tax form and it is sent to a different address and department.

DHC · Joined: 15 Jan 2003

US citizens must pay US tax even if you work overseas. This is in addition to paying Korean tax. As a US citizen you can qualify for an overseas tax exemption which will more than cover your income in Korea if you are teaching. You must qualify as an overseas resident (living overseas does not automatically make you an overseas resident for tax purposes) AND you must file a US tax return even if you don't pay any taxes. US law also requires that if you have a bank in another country which has $10,000 deposited during a tax year ($10,000 total accumulation in 1 year) then you must file a separate report with the US Treasury Dept. This is a different form than the tax form and it is sent to a different address and department.

mrsquirrel · Joined: 13 Dec 2006

If you are not resident in the UK for 186 days of the year or more you don't have to pay tax.
No tax here no tax there. = money in my pocket

icicle · Joined: 09 Feb 2007 Location: Gyeonggi do Korea

The fine points of what applies between different countries and Korea for taxation is found in the double tax agreements between the different countries ... For people from some countries this means exemption from Korean Tax for the first 2 years for people teaching in public schools ... and whether their income is then taxable in their home country (so how much tax they end up paying) depends on the tax law in their own country with regard to residents and working overseas ... It is different in each country ... and even within countries can depend on individual circumstances ... There is often not a black and white answer to the question ... But it is true that for many people who are covered by the Korean exemption for those 2 years they may not have to pay tax on that foreign income ... One thing that is certain is that you don't usually have a choice between paying tax in Korea or your home country ... And unless you want to get hit with a large tax bill down the track it is wise to check what the correct situation is for you ... (I did work for 11 years for the Taxation Office in my home country and this is one of the difficult areas of taxation law in our country)...

Icicle

Matman · Joined: 02 Jun 2006

icicle · Joined: 09 Feb 2007 Location: Gyeonggi do Korea

I was thinking about the tax question from the Australian perspective and remembered that a lot of the information I used was on the ATO website on the Internet ... There is a UK equivalent ... Which may give you enough information to ask the questions you need to ask ... or may answer your questions ...

The website is: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/LeavingOrComingIntoTheUK/DG_10027480

It has links to more information and to the people who can answer the questions you may have ...

Icicle

Woden · Joined: 08 Mar 2007 Location: Eurasia

Woden · Joined: 08 Mar 2007 Location: Eurasia

As a previous poster has said, if you are in the UK for 183 days or more you are a resident for tax purposes, if for less you are a non-resident...

If you're not resident
Overseas investment and property income

You won't pay any UK tax.

* Tax on foreign savings and investment income

Income from overseas pensions

You won't pay any UK tax.
Income from overseas employment

You'll pay tax only on your earnings for work done in the UK.

If you work partly in the UK, you'll pay tax on the part of your earnings allocated to that work. You usually allocate your earnings by looking at the number of days you work in the UK and the number of days working abroad.

dogshed · Joined: 28 Apr 2006