Amnesty through March for offshore tax evaders

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Amnesty through March for offshore tax evaders

The government is offering an amnesty to offshore tax evaders as long as they come clean and pay what they owe.

The Ministry of Strategy and Finance announced Tuesday that from next month through March 31, 2016, people who have hidden income or assets overseas can declare them and pay a tax plus a surtax of 10.95 percent on an annualized basis.

They will, however, face lighter criminal charges.

According to current tax codes, all residents and corporate bodies in Korea have to report income or assets worth 1 billion won ($848,500) or more in overseas bank accounts. If they fail to do so and are caught, those people usually have to pay the unpaid tax, surtax, fines and have their personal information made public.

Income and revenue from overseas-based companies or by non-Korean residents do not have to be reported.

People who admit to the money overseas but are suspected of embezzlement or breach of corporate responsibility are still subject to prosecution. Companies already under investigation by the National Tax Service or the prosecutor’s office cannot get penalties reduced under the amnesty.

“Those who do not report within the given time during this one-time amnesty will see no mercy or find a chance to explain their situation, and they will be subject to full penalties and punishment under related laws when they are investigated by the tax agency and prosecutors,” said Finance Minister Choi Kyung-hwan.

According to 2013 data from the International Fiscal Association Korea, residents and corporate bodies registered in Korea were estimated to have overseas-based assets worth 87 trillion won.

The Finance Ministry hopes to expand tax revenue for next year with the amnesty and give tax evaders a chance to confess before Korea begins exchanging tax payment information with some 50 countries, including the United States and United Kingdom, starting in 2017.

From 2017, all tax information in the Virgin Islands and Cayman Islands, popular tax havens for Koreans, will be shared with the Korean tax authority.

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