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  • PaulPTFC
  • Adventurer

    • 49

    • July 05, 2010, 02:29:44 pm
    • South Korea
Another tax query
« on: February 01, 2012, 01:36:26 pm »
I'm a UK citizen and I chose not to give a certificate of residency to my school when I started my job as I'd read a few of the scaremongering stories about tax. My girlfriend initially decided the same but recently changed her mind, obtained a certificate, gave it to the school and duly received a lump sum tax refund.

My question is this - I have two and a half months left on my contract. The whole process for my girlfriend took around three months. If I were to do this and the money from the Korean tax office didn't come through until, for instance, a month after  I left, I would be relying on my school to then transfer the cash to my UK bank account. Does anyone have any experience of this? Any help greatly appreciated.
www.thealienbank.com - Foreign restaurant reviews in Seoul and Gyeonggi.


Re: Another tax query
« Reply #1 on: February 02, 2012, 11:03:36 am »
Keep in mind that for UK citizens, our tax treaty with Korea is a dual taxation agreement which means that we (or Koreans in the UK) shouldn't get taxed on the same income by both countries.

HOWEVER, you're not supposed to not pay tax in either country. What I'm saying is that if you get your tax refund from Korea, the Inland Revenue in the UK will want tax at the UK income tax rate on your Korean income if they find out that you ended up not paying any Korean income tax on it. As I'm sure you're aware, the amount of UK income tax you'd pay is much higher than the Korean equivalent.

Of course, the ideal solution would be that you pay no tax (or get all you have paid refunded) in Korea AND get away without paying any in the UK because the Inland Revenue doesn't know about your untaxed Korean income. Particularly if you're intending to leave the UK again and work in another foreign country for some time, then there's a decent chance of getting away with that.

But if you're going back to the UK permanently, the UK Tax Man (evil bastard that he is) might catch up with you and demand a lot more money for your time in Korea than you would have paid in Korean income tax. I do know of a handful of people who worked in Korea and a couple of other countries to whom exactly that happened. I also know of a few Brits in Korea who decided that in the long run it was better to just pay the relatively small amount of Korean income tax so that they'd be completely safe on their return to the UK.

Sorry, I know this isn't an answer to the question you specifically asked, but just a heads up on something that has caught people out in the past. Good luck however you decide to play it.