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Foreign taxpayers to enjoy deductions, online services

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Good news for foreigners residing in Korea.

Foreign taxpayers to enjoy deductions, online services
Limit for medical expenses raised, filing guide released
December 23, 2009

Foreign wage earners residing in Korea can take tax deductions on up to 7 million won ($5,900) worth of medical expenses for their dependent family members this year, up from 5 million won last year, the National Tax Service said yesterday, with plastic surgery costs also to be included until the end of this year.

The National Tax Service yesterday released a guide for foreign workers in Korea looking to file their year-end tax settlement forms, summarizing what had been changed from 2008.

All workers who earn wage income here are subject to the year-end tax settlement, except for workers on daily contracts. They must submit year-end tax settlement forms with supporting documents to their withholding agents, usually their employers, by the end of January.

The agency recommended foreign workers refer to its “Easy Guide,” available on the NTS English Web site, http://www.nts.go.kr/eng.

According to the tax agency, the number of foreigners filing tax settlements has steadily increased to 345,000 last year from 282,000 in 2007 and 242,000 in 2006.

Foreign workers get special tax benefits. They can choose between exempting 30 percent of their wages earned in Korea from tax altogether, or a 15 percent flat tax on their total wages. Pay for engineers from abroad working on technology-transfer contracts here or for researchers in laboratories is exempt from all wage income tax for five years.

Any foreigner who is a resident of a country with an educational tax exemption provision in a tax treaty with Korea will see all income from teaching in authorized schools exempt from tax for up to two years.

Only residents of Korea are entitled to personal deductions for dependent relatives and “special deductions” for insurance premium payments, educational and medical expenses and others. Anyone whose “domicile” is in Korea or whose occupation requires a “place of residence” in Korea for at least one year or more is regarded as a resident, however.

Falling under “other income deductions” are special benefits for credit card spending and some savings accounts, also granted only to Korean residents.

The only personal deductions available to non-residents are those applicable to the taxpayer. They include a basic deduction on 1.5 million won and an additional deduction on 1 million won for seniors aged 70 or older.

By Moon So-young [symoon@joongang.co.kr]

Better get a Korean to translate/retrieve the documents for you though:

A foreign resident of Korea equipped with a Public Internet Certificate can easily acquire supporting documents, such as tuition bills or credit card bills, needed to claim deductions online at the NTS’s year-end tax settlement Web site, http://www.yesone.go.kr.

However, as of now, the site is only available in the Korean language.

“We are preparing to launch an English-language simplified year-end tax settlement Web site,” said Lee Dong-shin, who manages affairs related to international taxes at the NTS. “The service will be available starting with next year’s year-end tax settlement.”

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Written by recruiterinkorea

December 23, 2009 at 2:03 pm

Posted in Uncategorized

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