Most teachers that come to work in Korea for a year or so, fail to consider the implications of expatriate taxation. Regardless of which advice you glean here, you should talk to an accountant in your home country to properly consider your tax liabilities while abroad. Depending on your circumstances and which country you are from, you may not only have to pay Korean tax on your earnings, but also may have to pay tax on your overseas income in your home country, after you come back home. Unless you plan properly. Many people don't consider this and just willingly file a tax return when they come back, which is usually quite unnecessary and you are just throwing away thousands of tax dollars for no reason.
For example, if you are Canadian and can reduce the amount of ties that you have to Canada during your year or two abroad, you can put yourself in the assessment of being deemed a non-resident and are exempt of paying Canadian taxes on your world income.
If you are American, you may have heard about the $70,000 limit. That means that every overseas dollar that you earn below that threshold is exempt from US taxation. Only if you can prove a residence in another country for a least one calendar year. So in other words, if you leave a contract early to come back home, you are liable for tax. If you wait out the full year and retain a copy of your employment contract (to act as proof of residency for a one year term. The contract makes note of your Korean accommodation and residence.), you are in the clear. Many teachers who get homesick and consider leaving Korea early, fail to realize that not only will they be missing out on the remainder of their contractual income and the cushy contract completion bonus, but they will also be taxable in the US on what earnings they accrued while in Korea.
For more information about expatriate taxation in your home country, we strongly encourage you to sit down with an accountant to discuss and plan the tax implications of your overseas job, before leaving for Korea.
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