SOUTH KOREA: Tax dodges with an overseas angle being investigated.

As published on koreajoongangdaily.joins.com, Thursday 6 October, 2022.

At least one Korean failed to report the death of a parent to avoid paying inheritance tax, according the National Tax Service (NTS).

This is one of the 99 cases highlighted by the NTS on Thursday. Of the cases, 21 involved false reports of overseas residence.

In one example, a son failed to report the death of his father overseas and continued to collect rents on properties owned by the parent. In another, a person claimed to have moved and shifted wealth overseas while remaining in Korea.

Inheritance of assets outside of Korea is not taxed by Korea.

An owner of a business with offices abroad transferred money into foreign bank accounts that were opened under the name of one of the business owner's children. The money was wired to the child's bank accounts in Korea and then used to buy properties under the child's name.

The NTS is also looking into cases in which inheritance tax was avoided using false business transactions.

In one case, a child of a business owner recently purchased a property despite having no job. The purchase was financed with money from a loan made to a business, owned by the parents. The NTS tracked down the source of the funds to the parent's bank account.

Another business owner made a false report on the business income, falsifying labor costs. Money not properly reported was distributed in small amounts to bank accounts owned by others, including employees and relatives.

The money was then invested in financial products. Income and profits were then used to purchase real estate under the name of the owner's children.

"We are continuously investigating cases where people are trying to avoid taxes or inheriting their wealth through complicated means not only within the country but also moving in and out of the country," said Park Jae-hyung, an NTS senior official. "We plan to take aggressive action, including turning the cases over to the prosecutor, if the tax evasion is suspected to be malicious."

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