Off-shore account notification
Offshore account notification system hasintroduced in 2011 to prevent offshore tax evasion. Where off-shore bankaccounts of an individual or corporation have a total balance exceeding KRW1billion on any day among the last day of each months it is subject tosubmission of off-shore account details to the National Tax Service and thesubmission should be completed by the end of June of the next year to theNational Tax Service.
① A resident or domesticcorporation holding an overseas financial account at an overseas financecompany:
A resident who has address in Korea formore than 183 days.
A foreigner who has address in Korea formore than 10 years or has more than 5 years of having address in Korea.
② Standard amount for notification
In case of holding more than one account)as at the last day of any month of the relevant year exceeds 500 million won.
③ Subject of notification
The balance of the account of a personrequired to file a report under Article 34 (1) of the Act (hereinafter referredto as "person required to report") as at the last day of each monthshall be calculated by aggregating the amounts calculated according to thefollowing classification as to the assets of each overseas financial accountheld by the person required to report after converting them respectively at theexchange rate (referring to a daily base or arbitrated exchange rate under theForeign Currency Exchange Transactions Act) of the relevant nominal currencies.In such cases, if at least two persons jointly inherited an overseas financialaccount in the decedent's name in such cases, only the portions that each jointheir inherited, out of the balance of the account, shall be converted andaggregated
the amount prescribed by Presidential Decree,shall report the following information to the head of the tax office havingjurisdiction over the place for tax payment from June 1 to 30 of the followingyear
④ Penalty tax
Non-reporting or underreporting:
Below 2 billion won: 10%
2 billion ~ 5 billion won: 15%
~ Above 5 billion: 20%
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