Now that it's 2018, it also means it's officially tax season. Korean tax filing occurs in the month of January and it usually happens quickly. As an expat it can be a rather overwhelming experience, if you are under-prepared and ill-informed. Koreans let you know things at the last minute and expect you to file taxes as quickly as possible. It’s just the nature of their culture, so it is better to be organized in advance, instead of being caught off-guard.
Here are the top 3 things you need to know about doing your taxes while teaching in Korea.
1. What do I Need to File Taxes?
The most important thing to have when filing Korean taxes is a bank digital certificate. A bank digital certificate can be obtained online or at your local bank. You need to transfer it onto a usb stick, unless you will be doing taxes on your own computer. If you follow most online banking sites, there will be an option to transfer your digital certificate from your computer to your usb stick.
Next, you need to make sure that your bank is linked to your ARC card. Most foreigners do not have an ARC card when they arrive, so they apply for banking on their passports. Once your ARC arrives, you need to go back to the bank and give them the new information. Make sure you do this at least a week before filing taxes, since the amounts from your debit/credit cards will only show after 48 hours.
Besides your ARC card, you also need a home address, and a phone number connected to Kakao talk. Also, you should make sure to follow up that your academy has registered you with the MOE (Ministry of Education). Finally, you will need to get your employee ID number which you should be able to get by asking a manager at your branch
2. How do you File your Taxes?
Filing Korean taxes is a lot simpler than it looks. Unfortunately, everything is in Korean, so I highly recommend that you get your Team Manager or a Korean staff member at your branch to help you.
Everything gets submitted online, in one quick process. It literally takes about 10 minutes to get through all the necessary steps and all you have to do is provide the necessary items mentioned above. There are two websites you have to go to. First, you visit Hometax.co.kr and input your ARC card number, bank digital certificate with password, and check that all your payment information is correct.
Then you go to www.tax-refund.co.kr and insert the employee ID, your staff ID number and change your password. Afterwards, you follow all the steps until you reach the part where you insert your phone number. Then you will receive a Kakao text with the amount you will pay or receive from the government.
3. When do You Your Get Tax Refund or Have to Pay the Government?
In most cases, foreigners will get a tax refund. A way to make sure you get tax money back, is to pay more using cash or a Korean credit card. Unfortunately if you utilize your Korean debit card often, it could result in having to pay taxes back to the government.
When your tax amount is sent to you via Kakao, it will either say "- money" or "+ money." If it says "- money" you get a tax refund, but if it says "+ money" you have to pay the government. Both of these will either be added or deducted from your salary between March and July.
Freelancers will have to file taxes through a tax consulting firm and this should be done within their own time.
It is no surprise that Tijana Huysamen, a South African born Capetownian, avid traveler and travel journalist, fell in love with South Korea and its people. After Tijana arrived in South Korea in 2010, she had the opportunity to live in the heart of the Korean countryside. During her time spent in Chungnam province she learned to speak Korean, prepare Korean food and experience the humble nature of the countryside people. After a year break in New York, Tijana jumped at the opportunity to return to Korea again, and is currently working at the CDI Jamsil Branch, in Jamsil, Seoul. Read Tijana’s Aclipse blog to gain a unique perspective on Korea and her shared experiences and adventures both in a major city and in the countryside. Follow Tijana on Twitter @TeeAnni or email firstname.lastname@example.org to request more information on teaching in Korea!