By For all of you expats working in Korea here is some bad news for you:
Expats earning less than 100 million won ($86,133) a year will likely pay more taxes this year than last year because the government is ending a special tax benefit that foreigners had received.
A temporary tax benefit for foreigners enacted in 2004 had enabled foreigners to choose either to have 30 percent of their annual taxable income exempted from taxation or paying tax on only 15 percent of their total annual income including non-taxable income. Either way, most foreigners paid lower taxes than Koreans earning the same income. The revision in the tax act, however, ruled out the 30 percent tax exemption. A rule of thumb is that getting 30 percent of taxable income exempt is a better option for foreigners earning less than approximately 100 million won a year.
An example introduced by the National Tax Service was that of a 38-year-old foreigner who earns 50 million and pays 1.58 million won in taxes when he chooses the 30 percent exemption. If he chose the 15 percent rule, he would have to pay 7.5 million won.
“It varies from person to person, but it is likely that foreigners with less than 100 million won in income will pay more taxes from this year,” said an NTS official. [Joong Ang Ilbo]
2:45 pm on February 19th, 2010 1
They're ending the special tax benefit for foreigners?! Xenophobes!
4:18 pm on February 19th, 2010 2
There was a special tax benefit? That's news to me. Whenever I've claimed deductions, I ended up having to pay more.
5:05 pm on February 19th, 2010 3
You got me there. I've barely looked at my taxes here in Korea – they're taken care of by the school… or something…
Incidentally, if you're 38 and making 50,000,000 won, you're probably not a teacher. Let's change the average to 25 and making about 23,000,000 won and see how much tax you're actually paying
5:47 pm on February 19th, 2010 4
Foreigners paying less taxes than Koreans is just wrong. Yes, even I can admit that.
Do these expats include gyopos who didn't didn't doge the draft have to pay too?
5:48 pm on February 19th, 2010 5
dodge
12:58 am on February 20th, 2010 6
And another reason not to stay in Korea just popped up.
10:27 am on February 20th, 2010 7
How can we pay less is everybody else isn't paying?
10:28 am on February 20th, 2010 8
Because the Korean government stopped giving you special treatment?
10:32 am on February 20th, 2010 9
Did you mean to write, "How can we pay less if everybody else isn’t paying?"
Most Koreans and foreign nationals working for regular companies have their taxes automatically taken out. They have no choice what to pay. People who are self-employed or who work for small companies might be able to get away with underreporting incomes to avoid some taxation, but the government uses a variety of methods — from national insurance contributions to estimated per-employee calculations — to make sure they get at least a sizable chunk of what they are legally owed.
10:59 am on February 20th, 2010 10
Increasing the tax rate doesn't guarantee that more revenue will automatically come in to the tax department.
11:01 am on February 20th, 2010 11
Korea has a large problem with people cheating on their taxes. http://joongangdaily.joins.com/article/view.asp?a…
11:04 am on February 20th, 2010 12
In fact, it's become an industry-
http://joongangdaily.joins.com/article/view.asp?a…
2:37 pm on February 20th, 2010 13
"Did you mean to write, “How can we pay less if everybody else isn’t paying?”"
Isn't it obvious?
"Most Koreans and foreign nationals working for regular companies have their taxes automatically taken out. "
Yes, but I was referring to those who are self-employed.
2:41 pm on February 20th, 2010 14
What special treatment? Like I said, we no longer bother claiming tax deductions because we always end up receiving a bill for more taxes when we do.
10:29 pm on March 17th, 2010 15
Hmmm..Special Treatment….the SS had a different meaning for that term…