Up to 20% Fine for Failure to Report Overseas Financial Accounts... Disclosure of Names for Amounts Exceeding 5 Billion Won

[Asia Economy Reporter Kwangho Lee] The reporting of overseas financial accounts began on the 1st of this month. Residents and domestic corporations holding assets exceeding 500 million KRW must voluntarily report these assets to the National Tax Service by the 30th of this month. Failure to report or underreporting within the reporting period will result in a fine of up to 20% of the unreported (or underreported) amount, so caution is advised.

According to the National Tax Service on the 6th, a total of 364 individuals were fined 100.1 billion KRW for violations of reporting obligations by the end of last year.

An official from the National Tax Service stated, "If the unreported (or underreported) amount exceeds 5 billion KRW, the offender may be subject to a notice imposing a fine equivalent to a penalty or criminal punishment, and personal information of those who violate the reporting obligation may be disclosed," urging sincere reporting.

After this reporting period, the National Tax Service plans to focus its efforts on verifying unreported cases by thoroughly analyzing data exchanged with foreign tax authorities, information collected from other agencies, and its own intelligence activities.

The residents subject to this reporting are individuals who have an address in Korea or have stayed in Korea for 183 days or more, and domestic corporations refer to corporations whose head office, main office, or actual place of business management is located in Korea.

Financial assets held in accounts opened at overseas financial institutions must be reported, including not only deposits and savings but also stocks, bonds, funds, derivatives, insurance products, and all others.

Here, overseas financial institutions refer to financial companies located abroad; overseas branches of Korean banks and securities companies are included, but domestic branches of foreign banks are excluded.

An official from the National Tax Service said, "To make it easier and more convenient for those obligated to report, we will provide maximum reporting convenience and data, and we will strictly maintain confidentiality regarding overseas financial account reporters and their reported information in accordance with relevant laws," adding, "We ask those obligated to report overseas financial accounts to reconsider whether they are subject to reporting with the mindset that 'voluntary reporting is the best choice' and to report sincerely."