Tax Refund
How to Claim a Tax Refund on your Korean Spending
Written By Joey Nunez
Special Thanks to GIC Counseling Services
International residents are entitled to tax refunds. So, by following these steps for claiming a tax refund, you will be able to save money.
However for starters, if you are from a country that has a tax agreement with Korea and are currently not paying taxes, you cannot claim a refund. To find out if you are in a country, check out the National Tax Service website (the English version is accessible at: www.nts.go.kr/eng/)
Additionally, the Korean tax year ends on December 31. So if you are not going to be leaving Korea before New Year Eve’s, it is better not to complete the paperwork. You will not be able to claim a refund in your home country or while on vacation elsewhere.
So, now the good news. If you are sure you are paying taxes and will be in Korea for the start of the new tax year on January 1, 2017, then you can complete a tax refund at the end of this year.
The next important factor is the amount you will be refunded is based on your earnings on your total annual expenditure. In other words, if you earn very little but spend a little bit more than you earn, you can expect to receive a large refund. Also, if you are not spending very much relative to your earnings, you will not receive very much back.
Listed now are the best ways to achieve the biggest refund.
- Apply to use a cash-receipt card. This concept is to be handed to any server when you pay with cash. Tallying up your total expenditure using cash for the year is ideal for calculating your refund.
With this method surprisingly, you receive more of a refund for money spent using either cash or debit/cash cards. So if you are making large purchases, we recommend using cash or debit/cash cards.
- Apply for an electronic banking certificate. This method will allow you to register your bank account with the main Tax Office website. Visiting this website to see the full expenditure on your bank account for the year is possible with this method.
There is no need to rush updating records, as past transactions will also be included. However, having this type of certificate will also allow you to use Internet banking and to complete online purchases.
- Generate a yearly spending certificate by registering your cash receipt card and your bank account together, by using an electronic certificate using the main Tax Office website.
The work needs to be completed after the end of the previous tax year, when a tax return form must be competed, which is usually needed in January or February. It is however checking once to see if everything is working correctly. Once this certificate is completed, generating this report will help break down one’s yearly spending.
For all methods, we recommend that you ask a Korean to help with any of these processes. If you have difficulty securing help for yourself, the GIC can help by e-mailing counseling@gic.or.kr .
They will hopefully complete the tax form for you