As published on koreaherald.com, Thursday 10 September, 2020.
The number of foreign account holders that reported to the National Tax Service surged 24 percent on-year to 2,685 worth nearly 60 trillion won, data showed Thursday.
In June, 1,889 residents of Korea reported accounts to NTS, each holding a balance of 4.2 billion won on average, while 796 Seoul-based corporations documented accounts, with an average balance of 65.2 billion won. Their total account balance came to 59.9 trillion won ($50.5 billion), down 2.6 percent from the previous year. The number of overseas accounts, however, surged as authorities widened the range of account holders subject to report to those with balances of at least 500 million won, up from a previous threshold of 1 billion won.
The estimate comes as the tax authorities are beefing up oversight on the evasion of tax related to overseas financial income.
NTS said that Korea is poised to team up with 108 jurisdictions including Switzerland, Singapore and Panama, as well as autonomous territories such as the Cayman Islands, Hong Kong and Macau for automatic exchange of financial information. Korea signed up to the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information.
Under the Korean rule, a failure to report foreign funds to tax authorities are subject to fine that amounts to 20 percent of the balance. Violators who are caught must clarify the origin of the funds, or face an additional fine worth 20 percent of the balance. This applies to both individuals and corporations.
Those who were found to have hidden over 5 billion won of foreign funds are subject to up to two-year jail term.
Since 2011 until end-June, NTS has slapped a combined 112.5 billion won in fines on 382 individuals and companies who failed to report their offshore accounts.