"Overseas Trust Assets" Must Be Reported to the National Tax Service Starting in June

A 10% Penalty on Asset Value for False or Missing Submissions

Assets entrusted overseas must be reported to the National Tax Service starting in June 2026. This measure aims to legalize overseas assets and prevent offshore tax evasion.

On January 23, the National Tax Service held a briefing session on the "Overseas Trust Reporting System" at the Seoul Regional Tax Office for 70 representatives from major tax, accounting, and law firms, as well as financial institutions and related organizations specializing in overseas asset management.

This briefing was organized to introduce the "Overseas Trust Reporting System" to relevant organizations, as the National Tax Service will receive overseas trust data for the first time this year. The session also aimed to encourage voluntary and accurate reporting by those obligated to submit such information. From this year, anyone holding trust assets overseas is required to report them.

Until now, the National Tax Service has worked to legalize overseas assets and prevent offshore tax evasion by continuously improving systems that require taxpayers to submit information on direct overseas investments, overseas real estate holdings, and financial accounts (including virtual assets). However, some high-net-worth individuals and companies have attempted to evade taxes by hiding income and assets in overseas trusts, exploiting the difficulty in identifying settlors and beneficiaries.

A National Tax Service official stated, "The overseas trust reporting system was introduced to preemptively curb such practices and effectively respond to tax evasion using similar methods," adding, "We expect this will greatly help in legalizing offshore assets and strengthening tax base management in the future."

Residents who maintained an overseas trust for even a single day last year must submit details of their overseas trusts to the National Tax Service by June 30, 2026. Domestic corporations that maintained an overseas trust for even a single day during the previous fiscal year must submit their overseas trust details within six months from the end of the month in which their fiscal year closes. Failure to submit, or submitting false overseas trust details, will result in a penalty equal to 10% of the value of the overseas trust assets.

Before the June filing period, the National Tax Service plans to publish informational materials about the overseas trust reporting system and will individually notify taxpayers who are likely to hold overseas trusts, actively supporting voluntary and accurate reporting. For those who fail to report, the agency will conduct verification based on field-collected information, foreign exchange transaction records, and information exchange data, imposing penalties and collecting evaded taxes such as income tax, inheritance tax, and gift tax as appropriate.

Commissioner Lim Gwanghyun of the National Tax Service stated, "The overseas trust reporting system is an important measure to legalize offshore assets held through trusts," adding, "As the National Tax Service receives overseas trust data for the first time this year, we will actively guide the implementation of the system and take strict action against violators."