NZ tax Q & A

What is the tax situation for NZ citizens? How do I apply for Korean tax exemption and where can I find the application form?

Thanks

There is no residence certificate for NZ, so you will need a letter from the IRD.  You will need to explain to the KTA the residence letter doesn't exist.  The form can be completed and given to your school administrator to file for you.  Also, tax exemption is only applicable to those working in government funded schools (public schools)

Ok thanks! Is there a cut off point for which this needs to be filed, like the first two weeks or anything? and also, are there any snags on returning to NZ? I've heard something about being stung with having to pay the full NZ tax for what I've earned while away.

Ok thanks! Is there a cut off point for which this needs to be filed, like the first two weeks or anything? and also, are there any snags on returning to NZ? I've heard something about being stung with having to pay the full NZ tax for what I've earned while away.

They will prefer you to submit within the first 2 months, but it is retroactive so it shouldn't matter.
You cannot be charged tax in NZ on foreign income provided you are a NZ non resident for tax purposes (living outside the country for greater than 183 days).

Thanks. So I just need to show my school admin a letter from the IRD with my name, address and IRD number?

im with TaLK and the previous scholars told me we get a year off tax exempt without doing anything? is that true?

I've not heard that... I hope it's true

im with TaLK and the previous scholars told me we get a year off tax exempt without doing anything? is that true?

To be a tax resident of Korea you need to live or intend to live (via contract) in Korea for 365 days.  To be a non tax resident of New Zealand you need to be out of the country for greater than 184 days. 

TaLK teachers will need to declare their foreign income with the New Zealand IRD whether or not they are taxed in Korea.

First two years you can claim all of your tax back. After that you maybe able to claim a little back, but not all.

just a quick question about being a non resident (for tax purposes)...

on the IRD website it says to qualify you must be out of the country for longer than 183 days and have no enduring ties with NZ- property/family/bank accounts etc.

has anyone returned and been stuck with a huge tax bill because of this?

I've been trying to sort this out with my school, but I've been told that none of the deductions from my pay are 'tax', only insurance/pension etc.  Yesterday my co-teacher went to the local tax office and still no dice...Is it easier just to make a claim for tax at the end of the 2 year tax exemption period?

I've been trying to sort this out with my school, but I've been told that none of the deductions from my pay are 'tax', only insurance/pension etc.  Yesterday my co-teacher went to the local tax office and still no dice...Is it easier just to make a claim for tax at the end of the 2 year tax exemption period?

If none of the deductions are 'tax' then you haven't been taxed.  Isn't that what you wanted?  What is there to sort out?

I've been trying to sort this out with my school, but I've been told that none of the deductions from my pay are 'tax', only insurance/pension etc.  Yesterday my co-teacher went to the local tax office and still no dice...Is it easier just to make a claim for tax at the end of the 2 year tax exemption period?

If none of the deductions are 'tax' then you haven't been taxed.  Isn't that what you wanted?  What is there to sort out?

Perhaps I have not, and that would be fine.  But considering that in order to be tax exempt, I have been asked to complete this application - one which my co-teacher or school knows nothing about or how to process.  So, it would seem strange to not be paying tax from the outset of my contract like every one else. 

just a quick question about being a non resident (for tax purposes)...

on the IRD website it says to qualify you must be out of the country for longer than 183 days and have no enduring ties with NZ- property/family/bank accounts etc.

has anyone returned and been stuck with a huge tax bill because of this?

You should write to IRD and declare yourself non-resident for tax purposes.  Yes, they can decide that is not the case, but you are in a genuine non-resident situation so they are unlikely to do that.  When you do this you can ask them to send you a letter, any letter, which you can use as your 'Residence Certificate'.  There is no such thing in NZ, but a letter from IRD on headed paper with your name and address should suffice.

As a non-resident for tax purposes you are not liable to tax for your overseas earnings (Let me reiterate, if you are non-resident for tax purposes then you are not liable to tax in NZ for your Korean income.)  You *are* liable to tax in NZ in respect of any *NZ* income, for example interest on savings in any NZ account you hold, or income from rental property you might receive from an NZ source.  You are probably liable to tax in Korea for this too, but I don't know about that.

You are allowed to retain bank accounts in NZ, and in fact, you can qualify for a non-resident tax rate of 10%.  You have to write to your bank and declare your status and ask for that rate.  If you do this then you must write and tell them when you go back to NZ and become resident again.  Basically this means any interest you earn in NZ will be taxed at 10% instead of 19% (or whatever your tax bracket was).

So, bottom line, tell IRD you are non-resident for tax purposes.  Tell your bank you are non-resident for tax purposes and you want the Korean non-resident tax rate.  The downside is (I think) you have to pay your student loans if you are outside NZ (if you have any), but I don't know about that either.

Just to double check, if we have already been in Korea for two or more years we are not able to get this tax exemption right?

Just to double check, if we have already been in Korea for two or more years we are not able to get this tax exemption right?

Right, it only lasts for 2 years. Then you start paying tax.

Bummer, Thank you though.

Is it at all possible to be refunded for tax money if you have been working at a hagwon?

I have been receiving conflicting information regarding Nz'ers and the pension.
I have been on the NZ Immigration site that says NZ does not have an reciprocal arrangement with Korea hence I am not eligible to be refunded the contributions I am making into the pension fund, at the end of my contract.
A friend of my husband (a New Zealander) has been living in Korea, on and off, for the last 8 years. He has been home a couple of times and says he has not been refunded his pension.
My questions are - is it true that I will not receive my pension refund at the end of my year?
If I do not, do I have to keep making payments into something that I will not get back?
Many thanks

I have been receiving conflicting information regarding Nz'ers and the pension.
I have been on the NZ Immigration site that says NZ does not have an reciprocal arrangement with Korea hence I am not eligible to be refunded the contributions I am making into the pension fund, at the end of my contract.
A friend of my husband (a New Zealander) has been living in Korea, on and off, for the last 8 years. He has been home a couple of times and says he has not been refunded his pension.
My questions are - is it true that I will not receive my pension refund at the end of my year?
If I do not, do I have to keep making payments into something that I will not get back?
Many thanks

Yes, you do have to keep paying this pension by Korean law.
And no, you will not get your money back.  UK, Australia and NZ are some of the countries which do not receive pension money back.
You still have to pay it.  If you turn 65 years old and you're still here then you'll get it back.