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Career Venue => Contract, and Job Related Issues => Topic started by: vinny on August 29, 2011, 10:28:41 am

Title: NZ tax Q & A
Post by: vinny on August 29, 2011, 10:28:41 am
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
Title: Re: NZ tax Q & A
Post by: Daejeon on August 29, 2011, 10:37:04 am
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)
Title: Re: NZ tax Q & A
Post by: vinny on August 29, 2011, 12:10:14 pm
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.
Title: Re: NZ tax Q & A
Post by: Daejeon on August 29, 2011, 12:19:12 pm
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).
Title: Re: NZ tax Q & A
Post by: dash17 on September 02, 2011, 02:10:11 pm
Thanks. So I just need to show my school admin a letter from the IRD with my name, address and IRD number?
Title: Re: NZ tax Q & A
Post by: bon.ni135 on September 20, 2011, 11:18:04 am
im with TaLK and the previous scholars told me we get a year off tax exempt without doing anything? is that true?
Title: Re: NZ tax Q & A
Post by: dash17 on September 28, 2011, 02:17:42 pm
I've not heard that... I hope it's true
Title: Re: NZ tax Q & A
Post by: Daejeon on September 28, 2011, 02:34:37 pm
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.
Title: Re: NZ tax Q & A
Post by: Valiant on October 04, 2011, 03:52:56 pm
First two years you can claim all of your tax back. After that you maybe able to claim a little back, but not all.
Title: Re: NZ tax Q & A
Post by: sophypoph on October 10, 2011, 02:21:21 pm
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?
Title: Re: NZ tax Q & A
Post by: vinny on November 22, 2011, 11:32:02 am
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?
Title: Re: NZ tax Q & A
Post by: lotte world on November 22, 2011, 12:43:48 pm
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?
Title: Re: NZ tax Q & A
Post by: vinny on November 22, 2011, 01:19:23 pm
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. 
Title: Re: NZ tax Q & A
Post by: lotte world on November 22, 2011, 03:41:42 pm
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.
Title: Re: NZ tax Q & A
Post by: Bloke on December 02, 2011, 11:19:57 am
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?
Title: Re: NZ tax Q & A
Post by: glb0b on December 02, 2011, 12:08:48 pm
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.
Title: Re: NZ tax Q & A
Post by: Bloke on December 06, 2011, 09:04:10 am
Bummer, Thank you though.
Title: Re: NZ tax Q & A
Post by: jayjay on January 08, 2012, 08:05:50 am
Is it at all possible to be refunded for tax money if you have been working at a hagwon?
Title: Do New Zealanders have the pension contributions refunded.
Post by: quack3 on January 08, 2012, 08:56:28 am
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
Title: Re: Do New Zealanders have the pension contributions refunded.
Post by: jayjay on January 08, 2012, 09:13:05 am
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.
Title: Re: NZ tax Q & A
Post by: glb0b on January 08, 2012, 10:15:27 am
Is it at all possible to be refunded for tax money if you have been working at a hagwon?

I don't believe so. I think that the tax excemption only applies to public schools. Hagwon teachers have to pay tax.

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

Sadly, you have to pay and you will not get the 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.

Australia recently made an agreement so now Australians can get the money back. Lucky them!
Title: Re: NZ tax Q & A
Post by: Daejeon on January 09, 2012, 04:43:33 pm
Australia recently made an agreement so now Australians can get the money back. Lucky them!

My mum is Australian so I'm looking into getting an Aus passport. Can anyone see any potential glitches with this?

There are only pro's to being Australian.  You may have to learn how to say "fush and chups" properly.
Title: Re: NZ tax Q & A
Post by: Rhodesian on February 21, 2012, 03:06:05 pm
Here's another question

If you are a UK citizen and a NZ permanent resident, can I get my tax back and do I have to write to the NZ IRD for that non-resident headed paper letter that was mentioned?
Title: Re: NZ tax Q & A
Post by: lotte world on February 21, 2012, 05:35:36 pm
Here's another question

If you are a UK citizen and a NZ permanent resident, can I get my tax back and do I have to write to the NZ IRD for that non-resident headed paper letter that was mentioned?

Are you at a public school?  If so, you should qualify for tax-free status for the first two years as a UK citizen (this is stated in your contract).

You must have applied as a UK citizen, so you need to get your residency certificate (or equivalent) from the UK.

Title: Re: NZ tax Q & A
Post by: phatnesian@gmail.com on March 02, 2012, 01:21:13 pm
I read on a blog that if you were an NZ resident you would not eligable to redeem the Korean pension upon leaving. I was wondering if this is true? I checked a couple sites, but thought it might be best to ask.

Thanks
Title: Re: NZ tax Q & A
Post by: karinapowys on March 05, 2012, 10:34:47 am
Thanks for all of the info!

Do I need to fill in this attached form with my letter from IRD?

Thanks,
Karina
Title: Re: NZ tax Q & A
Post by: bawaugh on March 07, 2012, 01:07:02 pm
Being a New Zealand Citizen does not get you the exemption.

When I rang the IRD I was told that I needed to be a New Zealand tax resident in order to obtain this exemption. The exemption was not able to be given to me, despite the fact I am a New Zealand Citizen, because it depended on being a New Zealand tax resident before I started living in Korea. Because I had spent the previous 4 years in Ireland I was not a tax resident and thus could not get this exemption.
Title: Re: NZ tax Q & A
Post by: karinapowys on March 07, 2012, 01:10:47 pm
Being a New Zealand Citizen does not get you the exemption.

When I rang the IRD I was told that I needed to be a New Zealand tax resident in order to obtain this exemption. The exemption was not able to be given to me, despite the fact I am a New Zealand Citizen, because it depended on being a New Zealand tax resident before I started living in Korea. Because I had spent the previous 4 years in Ireland I was not a tax resident and thus could not get this exemption.

Are you talking about pension refunds or tax exemption?  ???
Title: Re: NZ tax Q & A
Post by: bawaugh on March 09, 2012, 09:53:51 am
I was referring to the Tax exemption.

For the Record the section of theNew Zealand/Korea double tax agreement which gives this benefit says

Article 21
Professors and teachers
1. A professor or teacher who is or was a resident of a Contracting State immediately before making a visit to the other Contracting State, and who, at the invitation of any university, college, school or other similar educational institution, which is recognised by the competent authority in that other Contracting State, visits that other Contracting State for a period not exceeding two years solely for the purpose of teaching or research or both at such educational institution shall be exempt from tax in that other Contracting State on any remuneration for such teaching or research.

2. The provisions of paragraph 1 shall not apply to income from personal services for research if such research is undertaken primarily for the private benefit of a specific person or persons
Title: Re: NZ tax Q & A
Post by: blairfitz on March 31, 2012, 07:14:49 pm
Yes it is a terrible system for us kiwis for sure but it is compulsory for us to pay pension and we do not get is back but sometimes the institute will be slightly dodgy and not pay it or they may use a private pension scheme that is possible to get the pension back. If you are lucky you will get it back but do not hold your breath.
Title: Re: NZ tax Q & A
Post by: Powerdome on April 06, 2012, 09:33:24 pm
Kiwis have to pay pension...but we dont get it back!
Title: Re: NZ tax Q & A
Post by: tcheyanne on June 23, 2012, 04:59:53 pm
I have a question on tax for NZers if you leave from Australia.

I moved to Australia when I was 16 and never had a job in NZ. I probably have an IRD number lying around somewhere but I've never applied for a tax claim while I was in NZ. Since I have been living in Australia I have a job and a TFN number and have claimed for tax. I don't have any bank accounts in NZ or any property to claim tax on.

Do I have to claim on my IRD number or can I just use my TFN?

I am not in Korea yet, but plan to so I would just like to know in advance.

Thanks
Title: Re: NZ tax Q & A
Post by: bawaugh on July 09, 2012, 08:15:47 pm
I have a question on tax for NZers if you leave from Australia.

I moved to Australia when I was 16 and never had a job in NZ. I probably have an IRD number lying around somewhere but I've never applied for a tax claim while I was in NZ. Since I have been living in Australia I have a job and a TFN number and have claimed for tax. I don't have any bank accounts in NZ or any property to claim tax on.

Do I have to claim on my IRD number or can I just use my TFN?

I am not in Korea yet, but plan to so I would just like to know in advance.

Thanks

I understand that Australians work tax free in Schools here for two years, check the Australia Korea double tax agreement. It will depend on what the fine print says on if you can work tax free for two years. I could not take advantage of the two years of tax free earnings for NZers because I was living in Ireland before I came to Korea and thus was not a tax resident of NZ immediately before I came to Korea.

 In this case it will depend on what the Australian Korea tax agreement will say and thus this will decide if you are liable for Korean tax or not. I don't think your nationality matters in this case.   

As for your tax liability in NZ, I doubt you have any, once your are out of NZ for 325 days and have no enduring relationship with NZ you are not liable for any tax on overseas income. I don't think they count bank accounts in NZ. I don't think you owe NZ any tax on your Korean income. To get NZ tax residence I understand you have to spend 185 says in the country in 12 months.

I suggest giving the IRD in NZ a call as they are better placed to give you advice on this issue. At the end of the day I could easliy be wrong, I am not a tax lawyer. The IRD was very nice and helpful when I rang them. I did not have to give them my IRD number.

For the record in NZ there are no tax returns if you are earning PAYE income - unless you want to file one or think you have overpaid. 

http://taxpolicy.ird.govt.nz/tax-treaties/korea (http://taxpolicy.ird.govt.nz/tax-treaties/korea)
http://taxpolicy.ird.govt.nz/contacting-us (http://taxpolicy.ird.govt.nz/contacting-us)

In any case Korean taxes are very low. However I don't know about Australian tax liability - ring the ATO they should know.

In summary - your NZ passport is of no use to you, for the NZ Korea Tax exemption because you are not a tax resident of NZ just before going to Korea. It will depend on the Korea Australia double tax agreement if you get the tax break. And ring the Tax authorities as they will be better placed to tell you if you will get any tax break or not.

Of course please be aware I am not a tax lawyer or expert and thus use what I have said at your own risk. Don't blame me if you end up with a surprise tax bill.

NZ Korea double tax treaty. (for the record)

Article 21
Professors and teachers
1. A professor or teacher who is or was a resident of a Contracting State immediately before making a visit to the other Contracting State, and who, at the invitation of any university, college, school or other similar educational institution, which is recognised by the competent authority in that other Contracting State, visits that other Contracting State for a period not exceeding two years solely for the purpose of teaching or research or both at such educational institution shall be exempt from tax in that other Contracting State on any remuneration for such teaching or research.

2. The provisions of paragraph 1 shall not apply to income from personal services for research if such research is undertaken primarily for the private benefit of a specific person or persons