Duty to report
Where a resident or domestic corporation makesan overseas investment it is mandate to report to financial institutions andtax authorities. Otherwise, it is subject to fines.
(1) Report to financial institutions
Foreign currency exchange law stipulates thatoverseas investors have obligations to report to financial institutions fortheir investment in foreign countries as a post-management methods. There aresanctions against non-compliance with such obligations including suspension offoreign transactions and fines.
☞ Remittance (investment)report: right after making remittance (investment)
☞ Foreign currencysecurity acquisition report: within six months after paying in capital funds(loan)
☞ Annual reports on profit andloss: before May after completion of accounting period
☞ liquidation of direct foreigninvestment and claimable assets withdrawal: right after collection ofliquidation fund (principal and interest)
(2) Report to the tax authorities
① Investors who acquirereal-estate or make an investment in foreign countries are obliged to submit a‘statement of international transactions’ within filing deadline for income andcorporate tax return in addition to report to the financial institutions.Non-compliance or violation of the obligation is subject to fines.
☞ Foreign direct investment statement
☞ Statement of financialposition of the foreign corporation
☞Loss transaction statement of the foreign corporation
☞ Present condition ofestablishment of the foreign corporation
☞ Overseas real-estateinvestment statement
② Where a domestic corporation has transactions with a foreign-relatedparty submission of statement of international transactions and incomestatement of the foreign-related party is required to monitor whether there isprofit transfer caused by transfer price within income tax and corporate taxdeadlines. Non-compliance or violation of it is subject to fines.
③ Submission of a country bycountry report is an obligation for those who engage in cross-bordertransaction. The report varies depending on the size of the transaction withforeign-related parties; integrated report, individual business report, andcountry by country report. Non-compliance or violation of it is subject tofines
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