People say the year-end tax return is “the 13th payday” for office workers in Korea.
Expatriates working in Korea who have earned income are eligible for tax refunds through the year-end tax settlement, just like Korean citizens.
Though it requires filing some paperwork, non-citizen workers in Korea can avoid headaches by following filing guidelines and keeping their records in good order.
To receive a tax return, workers must present year-end income tax exemption forms and other related supporting documents.
While this has always been the case, there have been several changes to Korean tax laws this year that directly affect many non-Korean workers. Most prominently, from this year on, a 15-percent flat tax rate on total earned income will be applied to all non-Koreans. Until recently, non-citizens in certain fields could choose between having 30-percent of their income declared tax exempt or a 15 percent flat tax, according to the National Tax Office.
Also, from this year on, non-Koreans employed in certain technical and engineering fields are entitled an exemption of 50 percent on their earned income for two years. Previously, people employed in these fields were entitled to full tax exemptions for five years.
Those wh o hold both Korean citizenship and residency in another nation should be aware that the National Tax Office no longer classifies them as “foreigners” for tax purposes, and are not eligable for the 15 percent flat tax rate.
Non-Koreans who do not meet official residency requirements in Korea are not entitled to special deductions for things like insurance premiums, educational expenses, medical expenses, housing, donations, mortgages or other standard deductions. They are, however, entitled to basic deductions such as for age, disability, and pension savings.
From this year on, the same schedule for year-end tax settlement will apply to both Koreans and non-Koreans, who should submit documents to their workplace by early February.
| How to prepare a simplified year-end tax settlement |
The National Tax Office runs an English-language website (www.nts.go.kr/eng) with a PDF version of the “Easy Guide for Foreigners' Year-end Tax Settlement.” The website also provides an automatic calculation service so that visitors can estimate any refund they might be eligable for. The National Tax Office also runs a special interpretation service in 18 languages in cooperation with the Ministry of Justice, accessible through the NTS hotline for foreign taxpayers at 1588-0560 or 02-2076-5711.
For those who need more help, all local tax offices provide English-language service desks and the Seoul Global Center ) has a tax specialist available for consultation from 2 to 5 p.m. every Wednesday and Thursday. Call 02-2075-4145 for more information.
In 2009, the total number of non-Koreans who filed for the year-end tax return rose to 365,000 from 345,000 in 2008, accounting for 2.6 percent of the total workers who received a year-end tax settlement in Korea.
By Yoon Sojung and Jennifer Flinn
Korea.net Staff Writers
