A Residency Certificate or Residence Certificate is a document that proves a person is a primary resident of a certain country. In the case of living and working in South Korea, a Residency Certificate can exempt individuals from being double taxed while teaching at a public school in Korea.

Which Countries are Eligible for Korean Tax Exemption?

Citizens of the following countries are eligible to not pay income tax in Korea by providing proof of a Residency Certificate:

  • United States
  • United Kingdom
  • South Africa
  • Australia
  • New Zealand
  • Republic of Ireland (University positions only)

What if I Don’t Work for a Public School?

Unfortunately the benefit is only applicable to those who are public school teachers and therefore employed by the government. Those that work for private institutions and after-school programs are not eligible.

How Long Will I Be Exempt from Being Taxed?

Individuals that possess a Residency Certificate and submit it to their school will be exempt from income tax in Korea for their first 2 years in Korea only. Those that worked for their first year at a hagwon or private school and then transfer to a public school, will only be able to claim 1 year of tax exemption with a valid Residency Certificate. Those that taught at a private institute or private school for 2 years or more in Korea and then transferred to a public school will not be able to claim any period of tax exemption.

What is the Average Income Tax Rate Without a Residency Certificate?

An income tax of approximately 3.3% will be deducted from your salary.

How Can I Apply for a Residency Certificate?

Those that wish to apply for a Residence Certificate will need contact their country’s appropriate governing tax office. Please consult the following list to find out more information regarding your specific situation.

US Citizens – IRS Official Website | Form 6166 – Certification of U.S Tax Residency

UK Citizens – HMRC Official Website | Tax on Foreign Income

SA Citizens – SARS Official Website | Tax & Immigration

AUS Citizens – ATO Official Website | International Tax for Individuals

NZ Citizens – IRD Official Website | Tax Residency and Status

IRE Citizens – ITC Official Website | Irish Tax & Customs

How Do I Submit My Residency Certificate to Korea?

To obtain tax exemption while in South Korea, teachers will need to submit their Residency Certificate to their school’s administrative office at the beginning of the contract (before the first salary is paid). The worker in charge of taxation will then submit it to the appropriate governing tax office.

Individuals that plan to stay in Korea more than one year (with the possibility of transferring to another school after the first year), it is recommended that you apply for two residency certificate copies. Once you receive the residency certificate, it also advised to make a copy of the original(s) and keep it with you in the event the school may misplace the certificate after submission.

Featured Image Courtesy of JD Hancock and the Creative Commons