Canadian Tax Q&A

[Davey]

Where did you get 15% from? Isn't the tax in Korea 15%?

Second question, When can I apply for non-residency? Can I do it right now? I've only just come to Korea, and I don't know how long I'm staying here.

I just made up those numbers for illustration purposes.

As stated in the FAQ, you can call the CRA to self-declare yourself as a non-resident. Otherwise, you can submit form IT221R3-CONSOLID    Determination of an Individual's Residence Status.

Note, however...

"You are a non-resident for tax purposes if you...


do not have significant residential ties in Canada; and

you live outside Canada throughout the tax year; or

you stay in Canada for less than 183 days in the tax year."

Read the FAQ to see what the CRA defines as "significant residential ties."

[Redondo]

Oops, I meant to write 2.5% for Korea. I know they are just examples but that is more than 10x, so I'm checking if you meant for that to be accurate.

[Davey]

Oops, I meant to write 2.5% for Korea. I know they are just examples but that is more than 10x, so I'm checking if you meant for that to be accurate.

Tax rate is not 2.5% in Korea. I believe they raised it to 16% for 2013 (originally 15%).

Please read the following thread:

http://www.waygook.org/index.php/topic,42077.0.html

[Redondo]

Two more questions

So, I looked through the 'easy' 90-page guide for taxes, and it seems that most of the tax is deductable. So what kind of range am I looking at? In the example they give of someone earning 2.5m won, he pays about 120k.

And if they do this stuff, then why does the school take money out of the salary every month?

[Davey]

Two more questions

So, I looked through the 'easy' 90-page guide for taxes, and it seems that most of the tax is deductable. So what kind of range am I looking at? In the example they give of someone earning 2.5m won, he pays about 120k.

And if they do this stuff, then why does the school take money out of the salary every month?

It's just like in Canada.

The amount we get taxed per paycheque is based on basic deductions and credits. It doesn't take into account variable credits and deductions such as charitable donations, medical expenses, etc.

In the case of Korea, your spending is tax deductible (you may notice customers giving their phone numbers when they use cash), as are medical expenses and auto insurance premiums. With respect to spending, just use your debit/cheque card (Korean credit card if you're gonna get one) to pay for stuff so you don't have to register to the tax office to deduct your cash expenditures.