Canadian Tax Q&A

[Virginia]

Depending on how long you have been here, and whether or not you had a job in the months before you left for Korea, you may or may not have to file a tax return.

Fortunately, Canadians are rather present in overseas job markets, meaning that our government has a lot of support for us, which is nice.

I was receiving letters saying that I had to file a tax return for 2006, and poked around until I found the following phone numbers. To put your mind at ease, it's well worth it to call them. They are quite friendly and helpful and will help clarify the whole tax issue for you.

International Tax Services:

613-952-3741 (currently operating until 9pm, Ottawa time. You can also leave a voicemail)
613-952-3502 (The "problems" line - I was able to connect directly to a live person by calling this number when the other one rang busy)

They do accept collect calls as well.

You can download forms and information on your tax status from:

www.cra-arc.gc.ca

Hope this helps!

[Drapes]

I am Canadian 2 weeks away from the end of my public school contract. I am wondering if I can get some of the income tax deducted from my monthly salary refunded to me.

Can I apply for all the money I (might be) owed now?
Do you have to send in a tax refund during tax season?

Or is the korean tax man a jealous lover of money?

[Drapes]

NESTs (in public schools at least) don't do their own taxes, the school takes care of it. No need to do anything about it. You get whatever tax money you're owed when you get everything else.

[jehall]

Is there an additional step to do though to stop Canada from taxing you for money you made here? I'm not really sure how that works.

[krtastic]

I actually was quite curious about this myself. I recently finished my contract at an academy and I didn't get my taxes back, but instead was charged taxes. I've been told I can get that money refunded, but I'm not exactly sure how to go about filing the paperwork. My contract ended with that academy (I'm not at a new city with a public school) the end of May, so is it too late?

[Drapes]

Canadians don't pay double tax. You should only pay korean tax. I think when you do your canadian taxes you indicate that your foreign income is not to be taxed. Frankly my mother insisted on doing mine, so I can't be specific. You might want to ask Revenue Canada about that.

It is the Employer's responsibility to do your taxes.


You can call the foreign tax help line at 82-1588-0560. It was very helpful for me.



This is pretty comprehensive
http://www.korea4expats.com/article-income-taxes.html

You can go to the tax service website too,
http://www.nts.go.kr/eng/help/help_01.asp?top_code=H001&sub_code=HS01&ssub_code=HSA1
 but emailing questions is a waste of time, just call them instead.

[bmsteacher]

Unless you declared "Non-Residency" with Revenue Canada before you moved away, you pay Canadian taxes on all income, domestic and foreign.  You could, however, not declare your income; however, that is risky business.  Good luck!

[twitch]

I am Canadian and we only have to file taxes in ONE country. 
My first year I filed in Canada and paid ALOT.
After that....I only file (my school processes the paper work) in Korea (only a few hundred thousand won a year).

BUT....after the school files your taxes they will give you a summary statement.
You must take that to the local tax office and get an official form that says you paid your income tax internationally.

You don't need to do anything with this form right away....but keep it....because if you get audited in Canada over the next 7 years....you must prove that you paid your taxes internationally and that is why you didn't file in Canada.

[Davey]

Unless you declared "Non-Residency" with Revenue Canada before you moved away, you pay Canadian taxes on all income, domestic and foreign.  You could, however, not declare your income; however, that is risky business.  Good luck!

you're correct.

the probability of getting caught for not declaring your income is low, but there's always a chance of course. to minimize the risk, you should file your return for every year you were away from canada when you return to canada. or, if you file via netfile, you can simply file in Korea using the Internet.

if you file one year and not the previous, that's when the Canada Revenue Agency (CRA) will get suspicious, which you obviously don't want.

in the end, though, canadians are legally required to delcare what they earn overseas, unless you're a non-resident as bmsteacher noted.

[Daejeon]

Unless you declared "Non-Residency" with Revenue Canada before you moved away, you pay Canadian taxes on all income, domestic and foreign.  You could, however, not declare your income; however, that is risky business.  Good luck!

Non residence for tax purposes is automatically applied at the tax office after you have been outside of your native country for greater than 185 days.  To avoid double taxation, your country needs to have a double tax agreement with South Korea.  You will still need to submit an income assessment at the end of the financial year in your native country declaring all foreign income and taxes levied.  Even after having taxes refunded on your South Korean income, if you declare it in your income assessment you will not be liable for tax in your native country, provided there is a double tax agreement.

[Davey]

Unless you declared "Non-Residency" with Revenue Canada before you moved away, you pay Canadian taxes on all income, domestic and foreign.  You could, however, not declare your income; however, that is risky business.  Good luck!

Non residence for tax purposes is automatically applied at the tax office after you have been outside of your native country for greater than 185 days.

According to the CRA,

You are a non-resident for tax purposes if you:

normally, customarily, or routinely live in another country AND are not considered a resident of Canada;

OR

do not have residential ties in Canada; AND
you live outside Canada throughout the tax year; OR
you stay in Canada for less than 183 days in the tax year.

Residency status is determined by the follows:

The residential ties you have or establish in Canada are a major factor in determining residency. Residential ties to Canada can include:

a home in Canada;
a spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants in Canada;
personal property in Canada, such as a car or furniture;
social ties in Canada;
economic ties in Canada.

Other ties that may be relevant include:

a Canadian driver's licence;
Canadian bank accounts or credit cards;
health insurance with a Canadian province or territory.

If you don't have primary ties (e.g., home), the other ties may make you a resident of Canada (e.g., bank account). The only way to find out for sure is to ask the CRA to assess your status by filling out a certain form.

References
[/i]
Residency. http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

Non-residents of Canada. http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html

[Daejeon]

So clearly, you choose the second option as being outside of Canada for 183 days to be considered a non resident for tax purposes.

Thanks for finding the relevant tax authority.

[Davey]

So clearly, you choose the second option as being outside of Canada for 183 days to be considered a non resident for tax purposes.

Thanks for finding the relevant tax authority.

actually, i should've typed it like this:


do not have residential ties in Canada; AND

1) you live outside Canada throughout the tax year;

OR

2) you stay in Canada for less than 183 days in the tax year.

meaning you must not have residential ties at all AND satisfy either condition 1) OR 2).

so, if you still have residential ties, you're legally required to report your korean income on your canadian return even though you satisfy one of the two conditions.

canadians, check the CRA's web site--more info and the formatting is better. ^^

[Daejeon]

A lot different to Australia and New Zealand's.  I am sure that information will come in useful for new Canadian teachers.

[jonpurdy]

So I just got paid my first month in my new contract and (in addition to pension and healthcare) I'm being deducted 100,000 as a tax.

I heard something about not paying tax for the first two years, but I'm Canadian and thought I paid that already somehow.

Any ideas as to what this deduction is? Co-teacher just said "tax" and I'm just wondering if anyone has more specific info before I have her start digging more (she's great but a little bit overworked so I don't like to bug her if possible).

[confusedsafferinkorea]

Most teachers are exempt from Korean Income Tax for the first two years and then they are taxed, so this would be Income Tax for Korea.

[Davey]

So I just got paid my first month in my new contract and (in addition to pension and healthcare) I'm being deducted 100,000 as a tax.

I heard something about not paying tax for the first two years, but I'm Canadian and thought I paid that already somehow.

Any ideas as to what this deduction is? Co-teacher just said "tax" and I'm just wondering if anyone has more specific info before I have her start digging more (she's great but a little bit overworked so I don't like to bug her if possible).

you're right--canadians aren't exempt.

it's likely just income tax. since this is your third contract (i'm assuming you're with EPIK/GEPIK/SMOE), you should still be getting more money after all deductions than before. if not, it is probably a new deduction as you suspect.

simply ask your co-teacher to ask the administrative office to ask for a breakdown of your paycheque/paycheck or ask them yourself. it may be in Korean so ask somebody to translate or your phone, Google translate, etc. and do it yourself to get a rough idea on what the terms mean.

[jonpurdy]

So I just got paid my first month in my new contract and (in addition to pension and healthcare) I'm being deducted 100,000 as a tax.

I heard something about not paying tax for the first two years, but I'm Canadian and thought I paid that already somehow.

Any ideas as to what this deduction is? Co-teacher just said "tax" and I'm just wondering if anyone has more specific info before I have her start digging more (she's great but a little bit overworked so I don't like to bug her if possible).

you're right--canadians aren't exempt.

it's likely just income tax. since this is your third contract (i'm assuming you're with EPIK/GEPIK/SMOE), you should still be getting more money after all deductions than before. if not, it is probably a new deduction as you suspect.

simply ask your co-teacher to ask the administrative office to ask for a breakdown of your paycheque/paycheck or ask them yourself. it may be in Korean so ask somebody to translate or your phone, Google translate, etc. and do it yourself to get a rough idea on what the terms mean.

Yeah I got the breakdown .xls and in English it just says "Income tax". I'll do some research today and post my findings (in case anyone else is curious).

[twitch]

yep, canadians have to pay tax.  i get about 100,000won deducted a month. 

at the end of the year you can file your taxes either in canada OR korea. 
our country has this agreement with korea.
tip:  if you file in korea...you pay MUCH LESS.
but....if you file in korea....make sure you keep your documents, income statement and offical tax forms so that in the future, if you get audited in canada....you can prove that during these years you were paying in korea. 

btw....at the end of the year....your school will give you a summary of your income for the year and the school office will officially file your taxes for you.  just make sure they give you the paperwork when they are finished.

[joseph921]

I have a question for us Canadians when we return home after working in Korea.  It would be a huge help if someone who has already gone back home and can verify or clear up this cloud of uncertainty regarding taxes.

Do we have to declare something like our income we earned in Korea so that the Cdn government can take taxes from us?  If so, how much do we have to pay back (is it the same % as if we were earning income in Canada?).  And if the answer is yes, can someone explain why they deserve a % of my income I earned in another country that gave me a job when Canada failed to provide a decent job?

If the answer is no, do I basically keep everything i earned here in korea and just convert it back to cdn (lose some money) and claim pension?

Any insight into this would help a lot.  I did hear something about applying for a 'non-resident' form so I don't have to pay taxes to Canada since I'm not living there for a whole year.

I don't mind paying taxes, it's just, I'd rather pay taxes to Korea since they gave me this job rather than paying taxes to Canada when I'm not living there for a year and using any services they provide through our tax dollars.