Rich admit clandestine cash

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Rich admit clandestine cash

The hidden offshore wealth of over 300 wealthy Koreans was revealed by the government yesterday, one month after the country revised a treaty with Switzerland concerning double taxation.

According to the National Tax Service (NTS) yesterday, 302 individuals declared a total of 2.1 trillion won ($1.85 billion) held in foreign bank accounts in June. The number of people who made voluntary declarations jumped 43 percent from the same month last year. The amount of money declared increased 115 percent.

Under the current law, people who have deposited more than 1 billion won in overseas banks are required to report to the tax authority. This is the second year the nation has enforced the voluntary reporting program, which was intended to reduce tax evasion.

The NTS said that most of the cases involved high-profile figures, such as conglomerate chiefs and celebrities. Each person declared 6.9 billion won on average.

The largest share of 144 people held accounts at U.S. banks, followed by those with deposits in Hong Kong and Japan. However, the largest amount, or 918.8 billion won, was deposited at Japanese banks, according to the data. The NTS said the figure for Japan was higher than other countries due largely to investment in the Japanese stock market.

The figure for Switzerland showed a remarkable increase this year, owing to the revised agreement in July between the Korean and Swiss governments to make it easier for each other to request and obtain financial information on individuals suspected of hiding money in secret bank accounts. The amount of declared bank deposits at Swiss banks surged from 7.3 billion won last year to 100.3 billion, up 14-fold.

“Voluntary declaration of bank accounts in Switzerland shot up significantly after the news of the government’s agreement,” said Han Seung-hee, a tax auditor at the international tax bureau within the NTS. “About 10 people have so far come clean, but the number is expected to go up.”

Seoul has requested that Bern reveal the bank accounts of Korean tax dodgers.

Meanwhile, Korean individuals and corporations owned combined wealth of 18.6 trillion won in overseas accounts as of June, up 61.8 percent from a year earlier.

“The NTS will enhance its surveillance of tax evaders, while also cracking down on those who do not declare their accounts,” Han said.

The number of voluntary reports rose compared to last year, but still fell short of the government’s target.

The NTS said it will keep the identities of those who voluntarily declare their foreign bank accounts confidential.

By Song Su-hyun []

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