Most Remittances Sent to the United States and Canada
Number and Amount of Transactions Have Increased Since 2022
"Loophole Remittances for Gift Tax Evasion Must Be Examined"
The amount of remittances sent overseas under the pretext of tuition or living expenses for children exceeds 4 trillion won every year. Concerns have been raised that it is necessary to examine whether there are any “loophole remittances” aimed at tax evasion.
According to data released by Assemblyman Park Sunghoon of the People Power Party, a member of the National Assembly's Strategy and Finance Committee, the total amount of “remittances sent abroad (personal transfer transactions)” over the three years and eight months from 2022 to the end of August 2024 reached $12.207 billion. When converted using the average annual KRW/USD exchange rate for each year, this amounts to an astronomical 16.342875 trillion won.
Remittances sent abroad refer to foreign currency transfers made by banks to send customer funds overseas. The data obtained by Assemblyman Park specifically concerns “personal transfer transactions,” which are mainly remittances from parents to children for tuition or from family members to relatives living overseas, thus having the nature of gifts.
Both the number of remittance transactions and the total amount have increased each year. The annual number of remittance transactions rose from 462,000 in 2022, to 490,000 in 2023, and to 491,000 in 2024. As of the end of August this year, the number stood at 316,000.
During the same period, the total remittance amount also increased, reaching 4.0278 trillion won in 2022, 4.4597 trillion won in 2023, and 4.7125 trillion won in 2024, surpassing 4 trillion won every year. As of the end of August this year, the remittance amount stood at 3.142763 trillion won.
By country, as of the end of August this year, the United States received the largest number of remittances, with 137,000 transactions totaling 1.5961 trillion won. This was followed by Canada (37,000 transactions, 365.1 billion won), Australia (16,000 transactions, 177.6 billion won), and Japan (13,000 transactions, 113.6 billion won).
Under current foreign exchange regulations, individuals can remit up to $100,000 overseas per year without additional documentation. However, if a single remittance exceeds $10,000 or if the annual cumulative remittance surpasses the limit, the transaction is reported to the National Tax Service.
Despite the fact that more than 4 trillion won in gift-like overseas remittances are made every year, it has been pointed out that there is no effective system in place to quickly check for tax evasion. Assemblyman Park emphasized, “We must closely examine whether there are any loophole remittances for overseas gifts that undermine honest taxpayers,” and added, “The system must be improved to ensure there are no blind spots in tax collection.”
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