Expat bank info swapped with U.S.Korea and the United States agreed to swap information on bank accounts of their mutual expatriates.
Information on financial accounts of Koreans residing or working in the United States who earn more than $10 in annual interest will be reported to the Korean tax authorities starting in September. Seoul will also report to the United States about Americans with bank accounts in Korea, but the terms are a little less stringent.
The Ministry of Strategy and Finance said yesterday the finance ministers of Korea and the United States agreed to the mutual exchange of information first discussed in a meeting in April 2012.
Korea’s Ministry of Finance and the U.S. Treasury Department concluded the deal to exchange tax information that is in accordance with U.S. Foreign Account Tax Compliance Act (Fatca). The two have been negotiating the agreement for the past year.
Under the deal, Korea’s National Tax Service will be able to get account information for Koreans living or working in the United States, while the U.S. tax authority will be able to get those of Americans here.
Any accounts that earn more than $10 in annual interest will be reported to the NTS. Those accounts should have balances of at least $10,000.
Information on all accounts of Korean corporations in the United States will also be shared with the authority.
Under Fatca, the NTS will provide information about Americans with account balances of more than $50,000 to the U.S. Internal Revenue Service. The act requires financial companies around the world that have accounts by Americans to report to the IRS about accounts with balances of more than $250,000.
Banks, investment firms and insurance companies are subject to the latest agreement.
As of March 15, the United States has exchanged such information with 16 countries including Britain, France and Germany, while it has unilaterally received information from three countries: Japan, Chile and Switzerland.
“This agreement will help trace offshore tax evasion,” said an official at the Finance Ministry.
The Korean government currently requires individuals to voluntarily report to the NTS their overseas bank accounts with balances of more than 1 billion won. People who don’t report the information are liable to be fined.
“The existing overseas financial accounts reporting system hasn’t been effective, but now the agreement will help complement the system,” the official said.
By song su-hyun [firstname.lastname@example.org]