Question Belgian in Korea: Offshore company for service to one Belgian company?

[BigLab]

Hi,

I ve been reading many of the topics created here and of course, everyone has a specific and unique situation, I haven't found the answer for my case so here is my situation :

-I am a belgian citizen
-I live in Korea
-I can work remotely for a company based in Belgium

Question: does it make sense to create an offshore company (example: Cayman) and send monthly invoice to this belgium entity?

Neither Belgian or South Korean governements can claim tax on this revenue ? I will get a legal advice soon which I will share here for anyone interested. Hope this will help

Thanks in advance

 

[uplana]

Best would be to get the advise from the legal consultant.

I'm sure there are many around here that know the answer but still it would be a good idea to proof the answers.

 

[BigLab]

Best would be to get the advise from the legal consultant.

I'm sure there are many around here that know the answer but still it would be a good idea to proof the answers.

Thanks for the advice, I'll get back with some information later

 

[TravelAfficionado]

I think your offshore company might fall under Korean CFC rules and Korea will want to tax it. See the following link:

Korea, Republic of - Corporate - Group taxation

Detailed description of corporate group taxation rules in the Republic of Korea

taxsummaries.pwc.com

(Note that the link refers to ownership by a "Korean national", but other sources refer to Korean tax residents more broadly, i.e. you would probably be captured under the law.)

 

[BigLab]

I think your offshore company might fall under Korean CFC rules and Korea will want to tax it. See the following link:

Korea, Republic of - Corporate - Group taxation

Detailed description of corporate group taxation rules in the Republic of Korea

taxsummaries.pwc.com

(Note that the link refers to ownership by a "Korean national", but other sources refer to Korean tax residents more broadly, i.e. you would probably be captured under the law.)

Very interesting, thanks for this article. Looks like it won't be as easy as I expected.

 

[TravelAfficionado]

How long have you been in Korea?

If it's less than 5 years, then you can avoid Korean tax on your foreign-source income as long as you don't remit it into Korea. So, for example, get it paid into a bank account in a third country such as Singapore or Jersey.

South Korea – Taxation of international executives

Taxation of international executives.

home.kpmg

"However, as for a foreign resident who has had a domicile or place of residence in Korea for 5 years or less in aggregate in the previous 10 years ending on the last date of the tax year concerned, will not be subject to Korean income tax on the foreign-source income attributable to that tax year unless the income is paid or remitted to Korea."

Or another option is to get it paid to Korea and elect for the 19% flat tax available to expats.

 

[BigLab]

How long have you been in Korea?

If it's less than 5 years, then you can avoid Korean tax on your foreign-source income as long as you don't remit it into Korea. So, for example, get it paid into a bank account in a third country such as Singapore or Jersey.

South Korea – Taxation of international executives

Taxation of international executives.

home.kpmg

"However, as for a foreign resident who has had a domicile or place of residence in Korea for 5 years or less in aggregate in the previous 10 years ending on the last date of the tax year concerned, will not be subject to Korean income tax on the foreign-source income attributable to that tax year unless the income is paid or remitted to Korea."

Or another option is to get it paid to Korea and elect for the 19% flat tax available to expats.

I have been living in Korea for more than 5 years, so I don't think It would work indeed. I therefore cannot apply for the flat rate anymore. At my current company, they also told me the same thing.

Thanks again for the help!

 

[stupidboy]

any update?
in my personal experience, it can be claim tax depend on your money moving