Travel Reference
In-Depth Information
Taxes should be deducted from your salary at the standard rate each month by your em-
ployer, and employers also generally assist with the completion of an annual return due
early each year that will result in an additional payment being requested or, if you're lucky,
a refund. If you're not able to count on outside help, the required forms can be obtained in
English from the National Tax Service, and the agency also runs a multilingual tax counsel-
ing service that can guide you through the filing process, answer tax-related inquiries, and
look into cases where taxes are being improperly applied or withheld by an employer.
U.S. INCOME TAXES
U.S. citizens working in South Korea are still subject to taxes in the United States, but under
an income tax convention agreed on by the two governments, in theory they are able to de-
duct any tax paid in South Korea against their U.S. tax bills. If you spend at least one tax
year in South Korea in which you don't return to the United States for more than 35 days,
you're likely to qualify for the Internal Revenue Service's Foreign Earned Income Exclu-
sion, which exempts the first US$95,100 (as of 2012) earned by a U.S. national resident
abroad from U.S. income tax. There have been rumblings for some time about this exclu-
sion being revoked—check with the IRS or U.S. Embassy locally for current tax informa-
tion and advice on how to file your U.S. returns.
OTHER COUNTRIES' INCOME TAXES
South Korea has avoidance of double taxation treaties with a number of countries, including
Canada, Australia, Ireland, the United Kingdom, South Africa, and New Zealand, that allow
nationals of these countries to set any taxes paid in South Korea against their home tax ob-
ligations. Most countries also allow citizens fulfilling certain requirements to declare non-
residency for tax purposes, which usually exempts them from tax on (or even having to re-
port) income made elsewhere. These requirements vary from country to country and are ad-
justed regularly but generally involve having minimal attachments (like income-generating
property) back home or spending a certain amount of time abroad each year. As declaring
nonresidency can make a return back home more complicated, it's usually recommended
only for people spending a protracted amount of time abroad. Make sure to get the latest
from your tax authorities or a tax planner before making any hasty decisions, and don't
forget that being outside of the country doesn't automatically exempt you from having to
complete annual tax returns.
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