Last Year's Overseas Financial Account Reporting Amount Falls Below 60 Trillion Won
[Sejong= Asia Economy Reporter Kim Hyunjung] If you have an overseas account opened with an overseas virtual asset service provider for cryptocurrency transactions, those who are subject to the reporting obligation after January 1, next year, must report by June 2023.
According to the National Tax Service on the 3rd, following the tax law revision in December last year, accounts opened with overseas virtual asset service providers for virtual assets (cryptocurrency) and similar assets under the "Specific Financial Information Act" must be reported for the first time by June 2023.
The National Tax Service also disclosed the scale of overseas financial accounts reported last year, totaling 2,685 people and 59.9 trillion KRW. This represents more than a fivefold increase in both the number of reporters and the reported amount compared to 2011 (525 people, 11.5 trillion KRW), the first year of the related system's introduction, over the past 10 years. While the number of reporters has been increasing annually, the amount dropped to the 50 trillion KRW range after recording 66.4 trillion KRW in 2018 and 61.5 trillion KRW last year.
The overseas financial account reporting system requires residents and domestic corporations to report to the tax office having jurisdiction over the taxpayer if the total balance of overseas financial accounts held exceeds 500 million KRW on any day at the end of each month. This reporting includes accounts held last year with no transactions or accounts closed during the year.
A resident refers to an individual with an address in Korea or who has stayed for 183 days or more, and a domestic corporation refers to a corporation with its existence, head office, or substantial place of business management in Korea.
All financial assets held in accounts opened at overseas financial companies must be reported, including deposits, savings, stocks, bonds, funds, derivatives, and insurance products. Here, overseas financial companies refer to financial companies located abroad; overseas branches established by Korean financial companies are included, while domestic branches of foreign financial companies established in Korea are excluded.
The balance of overseas financial accounts at the end of each month is calculated by evaluating each asset held in the account, converting the evaluated amount into the relevant currency exchange rate, and summing the amounts by asset. If multiple heirs jointly inherit an overseas financial account in the name of the deceased, only the amount corresponding to each co-heir's inheritance share is converted and added.
The reporting deadline is June 30, and electronic reporting can be done not only through the National Tax Service Hometax but also via mobile from this year.
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