Korea Tightens Rules for Foreign Investment

SEOUL – Tax authorities in Korea are aiming to stamp out tax evasion by requiring taxpayers to declare all of their overseas investments.

On May 18th the National Tax Service of Korea issued a statement announcing that taxpayers will now be required to submit detailed information about investments or properties they hold abroad.

Taxpayers will have until by June 1st to submit their information regarding their foreign holdings.

Any taxpayer who do not submit the required information or take steps to willingly hide information in their submission will face fines, and may be required to undergo a full tax audit in the near future.

The provision for the submission of investment information was originally enacted in 2011, however, prior to now the system was voluntary.

It is estimated that in 2014 only 20 percent of taxpayers with overseas investments made a voluntary submission, however, the government had no power to push the remaining 80 percent into making a submission.

The government expects that the new regulations will help control tax evasion, while simultaneously bringing in extra tax revenues for the government.