Overseas account holders required to report to NTS

People who have held more than 1 billion won ($850,000) in overseas accounts even for a day in the past year are required to report to the nation’s tax agency by the end of this month.

Up to 100 million won in rewards will be given to others who report them.

The National Tax Service said Wednesday it will receive reports from residents of Korea or domestic legal entities that own a total of more than 1 billion won in listed stocks or accounts in foreign financial institutions.

The overseas financial account reporting system was introduced last year to prevent offshore tax evasion, expand tax revenue and enhance fairness. The system is in force in many countries such as the U.S., France, Canada and Australia.

People who do not report their holdings in overseas financial accounts or underreport them will be slapped with fines of up to 10 percent of the undeclared amounts. The ceiling has been raised from 5 percent last year.

Overseas account holders who have reported to the tax authorities last year are also required to report this year. Fines for non-compliance can be accumulated for five years.

The reports should contain the name and address of the account holder, account number, name of the financial institution, information about the account such as the highest balance reached in a year, beneficiary and nominal owner.

The reports can be filed online at www.hometax.go.kr or in paper to the local tax offices.

The NTS said it will guarantee confidentiality for those who report voluntarily and minimize intervention in their tax affairs.

The NTS plans to obtain a list of individuals and corporations that reported offshore interest earnings or assets and send out notices shortly.

Last year, 211 individuals and 314 corporations with more than 1 billion won in overseas accounts voluntarily reported a total of 11.48 trillion won in 5,231 accounts.

By Kim So-hyun (sophie@heraldcorp.com)