S. Korea to get access to U.S. financial data on its nationals

SEJONG, March 13 (Yonhap) — South Korea is expected to gain access to financial information on its nationals from the U.S. as the two countries are close to an agreement on sharing related data, finance ministry officials said Thursday, a move expected to help Seoul’s crackdown on offshore tax evasion.

South Korea is currently in talks with the U.S. to accept the Foreign Account Tax Compliance Act (FATCA), under which the U.S. can ask other countries to share information on financial accounts of its individuals and entities holding more than US$50,000 and $250,000, respectively.

If Korea accepts the act, it would also get access to financial information on its nationals from the U.S. The agreement would practically cover all financial information since any bank account that paid an annual interest of $10 would be subject to the act.

Currently, Seoul and Washington have broadly reached an agreement on FATCA with only the wording and other technical issues left to be resolved. The act is expected to be signed in July and go into effect in September next year, the officials said.

The Seoul government expects the deal will help it crack down on its nationals not reporting assets and evading taxes through offshore financial accounts.

So far, the government has had to ask individuals to voluntarily report their offshore financial accounts or resort to seeking related information from other countries in investigating suspected tax evasion.

“If the automatic data sharing starts in September (of next year), it would be a great help in preventing offshore tax evasion attempts by making it easier for us to figure out offshore income,” a ministry official said.

Credit: Global Post