Incheon to exact unpaid taxes from foreigners

The Incheon Metropolitan Government said Monday it will more efficiently collect taxes from foreign residents as the unpaid taxes of foreigners in the city from 2012 to May 2016 amount to over 500 million won ($427,700).

A foreign businessman residing in Seo District, Incheon, who refused to be named, has not been paying income and local tax since 2010. In April, the businessman was therefore hit with a total tax fee of 71 million won.

The Incheon office did not find any real estate properties or cars under the person’s name.

An official from the city, however, said, “We will soon visit his house to examine whether the person has concealed properties.”

As of 2012, there are about 5,741 cases of tax evasion by 4,209 foreign residents living in Incheon and the total amount of unpaid local taxes is about 559 million won, according to the city office.

There is currently about 420 million won owed in unpaid income taxes by 599 foreign residents, as well as about 117 million won in unpaid residence taxes owed by 3,556 foreigners in Incheon.

The amount of unpaid taxes by foreign residents in Incheon accounts for 3.2 percent of all unpaid taxes by foreigners residing in Korea, which is about 17 billion won as of 2012. As of March 2016, there are 57,574 foreigners living in Incheon. In order to combat the rising number of foreign tax evaders, Incheon has come up with various policies including sending notices in English to foreign residents in August and October 2016. Also, city officials will be visiting the homes and workplaces of foreigners who have not paid their income taxes, if the amount exceeds 5 million won.

The city office, with the help of Ministry of Interior, Ministry of Justice and Incheon Immigration Office, is planning to restrict visa extensions of foreign tax evaders in the city.

The Ansan branch of the immigration office is running a test trial of the plan in Ansan and Siheung, which has a dense foreign population, from May to December 2016. Depending on the result of the trial, Incheon office will be enacting the policy starting from 2017.

“Some foreign residents claim that they didn’t know they had tax liabilities because they couldn’t understand the notice of payment,” said an official from the Incheon office. “So the city decided to send tax payment notices in English for the first time in Korea and send payment reminders, as well.”

BY CHOI MO-RAN, SHIN SOO-YEON [shin.sooyeon@joongang.co.kr]