TEFL Teaching Abroad - Tax Issues and Visa Requirements
Admin - May 14 2016
Teaching abroad has always been a fun and fulfilling way to see the world while doing something meaningful. Before taking the bold step of moving from your native country in to a foreign land, it is best to understand some of the requirements for visa and tax compliance. It is important to note that the laws governing taxation and visa issues are constantly changing and it is therefore important to seek the most up-to-date information.
General Tax Info for UK and US Residents
If you are a citizen of UK, you are required to pay tax on salary earned abroad. There are usually three tests that will ascertain whether you are a UK residence or not. You have to fit in any one of the three categories. The three residence tests are the Automatic non-residence test, the Automatic residence test and the Sufficient ties test.
As an American citizen, you will be required to pay tax at home even while working abroad. However, you can reduce tax commitment through Foreign Earned Income Exclusion (FEIE) or through double tax treaties. Foreign Earned Income Exclusion works well for those earning less than $97,600. The system allow for your salary to be exempted from tax abroad for a given period of time. Those earning more than $97,600 will also be exempted from paying tax up to $97,600 but the amount above that will be subjected to 25% to 28% tax. This means that if you earn $98,000, you will only pay tax for the extra $400. To qualify for this, you will have to be a U.S citizen who resides outside the U.S for the entire fiscal year uninterrupted. It is required that you file your tax returns if your salary exceeds $9000 a year. Those who qualify for FEIE also qualify for Foreign Housing Exclusion of Deduction which will permit you to file your non-extravagant housing expenditures as tax deductible.
Here are some visa and tax requirements for some countries which are attractive destinations for teachers.
As an ESL teacher looking to work in Taiwan, it is not advisable to disclose to the authorities that you plan to work there. The reason is because the law instructs that you should have a working visa if you plan to teach in Taiwan. If you do not have a working visa, the authorities will even deny you the travelling visa and instruct you to get a working visa. However, it’s a bit challenging to get a working visa in Taiwan because you will need proof of employment. Being hired or getting a contract letter while outside Taiwan is not hard because schools and companies will send their teams to recruit for them outside Taiwan. Nonetheless I would discourage anyone from being hired outside of Taiwan because you will be poorly paid. Those teachers hired in Taiwan are paid a little bit higher and this is what you should target. Further, accepting a low pay is regarded as unethical because it adds to the deflation of teachers’ wages countrywide. However there might be companies or schools that will offer an attractive package even outside Taiwan.
Taiwan-Earnings and Tax
Earnings will range between NT$600 ($20) and NT$1000 ($30) per hour. You should expect to pay up to 20% income tax if your stay in Taiwan is less than 183 fiscal days. However, if you stay for more than 183 fiscal days, then you should expect to pay 6% income tax. This means that timing is essential if you want to avoid paying a heavy tax. For example if you arrive past October, you will not be able to hit the 183 days mark and you will have to part with 20% income tax. While trying to get a job in Taiwan, you will be better placed dealing with an employer directly rather than going through an agent. Most agents are out there to make as much money as possible. They are paid by the employer and some are even given a token for every hour you teach. As such, they put pressure on the schools and this may actually make it hard for the schools to pay you better. However, this does not mean that there are no good agents out there. The secret is to conduct a lot of research if you plan on using an agent to get a teaching job in Taiwan.
To work as an ESL teacher in Korea, you will need to get the E-2 visa. This one is a requirement for all foreign language teachers in Korea. The E-2 visa is a little different form the other regular visas. It offers thirteen months of stay compared to 12 months offered by the other visas. This means that you may arrive well before your contract begins and you won’t have to extend your visa before your contract ends. Further, the E-2 visa gives you three months leeway period so that you do not have to re-submit your documents again if you are changing jobs. This means that you may relax for three month before signing another contract.
The only way to get an E-2 visa is to first ensure that you secure a teaching job in Korea. If you travel to Korea and get a teaching job while there, you will need to start the process of applying for an E-2 visa. Immigration offices are very strict; ensure you have all the required documents.
The best way to get into teaching in China is to get a Z visa before getting to China. This ensures that your employer is legally recognized and permitted to employ teachers. You also avoid all the logistics involved in getting a visa while in China. However, some people prefer getting a Z visa while already in china since it is considered quicker and some may start teaching even before they get the Z visa. It is however important to note that this is illegal in China and there are some very strict laws reinforced by heavy penalties. The Z visa will just help you get in to china and your employer should help you get a work permit within the first 30 days of arrival. After getting the work permit, you will now be required to go through the process of getting a Residence Permit. School hiring foreign teacher will normally take care of the tax issues by deducting and remitting the tax on your behalf. You will get receipts for tax withheld from your salary. The amount of tax paid will depend of your earnings and the province you are teaching in.
In Japan, you will have to pay taxes as long as you are a resident there. There are two types of taxes. One is the income tax which is paid to the national government and the other one is the Local Inhabitant Tax which is paid to the local government. If you will be staying for more than one year in Japan, you will need to have a National Health Insurance Scheme and a Social Insurance Scheme. Your employer will sign you up for the Insurance Scheme which will provide both pension and health insurance. If they don’t, you will have sign up for both on your own.
To get a visa to teach in Japan, you will need a bachelor’s degree (or 10 years’ experience) and you will be required to be a native speaker. You can enter Japan using a normal travel visa then switch to a work visa once you get a job. The two options available for work visa are Instructor Visa which will permit you to work in public institution and Specialist in Humanities Visa which will let you work with companies and private institutions.
The process of getting a work visa in Egypt can be a lengthy one but employers usually assist with all the paperwork. It is therefore a good idea to get a job before you travel to Egypt. Before applying for a work permit, expats are required to obtain State Security Service clearance which requires them to undergo a medical checkup that includes HIV testing. Once you have provided all the documents required, you will them be required to pay registration fee.
In Brazil, it is not uncommon to find teachers working using their tourist visa. However, this is not legal. Getting a work visa in Brazil can be complicated and costly. Most of the teachers who get work permits are those that sign several years contract with international private schools.
Getting a work visa in Costa Rica is not an easy process. This is why many foreigners opt to teach using their 90 day tourist visa. However, this is illegal and may lead to deportation and a 10 years ban from travelling to Costa Rica. Some employers will help you get a temporary residence permit; a process that takes 3 to 6 months. You can then apply for a work visa which may take up to 2 months to process. The process will cost you approximately $100.
Obtaining permission to teach in a foreign country can be a hectic process and sometimes a costly one. However, the benefits of teaching legally and the heavy penalties of teaching illegally should greatly compel a teacher to obtain a work visa. It is important to gather as much information about the visa requirements of a country before committing yourself. Most of the information will be available in embassies or consulates in your country. Online sources can also give you some general insight into matters pertaining to travel documents and taxation.