Nation’s tax agency sees more reporting offshore holdings
According to the National Tax Service on Wednesday, the number of individuals and companies that reported offshore holdings as of the end of June totaled 1,053, a 27.5 percent increase from the first half of last year.
The holdings amounted to 56.1 trillion won ($51.4 billion), a 52 percent year-on-year increase and a jump of 19.2 trillion won. This is the second consecutive year that reported overseas holdings have increased more than 50 percent year on year.
“Such an increase is believed to be the result of [the government’s] continuous campaign to encourage voluntary reporting of offshore income and wealth,” a tax agency official said.
Ever since the National Tax Service required everyone to report offshore financial holdings in 2011, the agency has levied a combined fine of 54.6 billion won on 179 individuals and companies that failed to report their holdings overseas.
The individuals, 153 in total, accounted for 85.5 percent of those fined, paying up a combined 49 billion won. This amount makes up nearly 90 percent of total fines since 2011. Twenty-six companies were fined 5.6 billion won during the same period.
The number of people fined for failing to report has decreased in recent years. During the first half, 17 individuals and companies were slapped with combined fines of 3.9 billion won, an 11 percent drop from the 4.4 billion won fined at the end of 2015.
Last year, the amount of reported overseas holdings increased at the sharpest rate, spiking 77.8 percent to 4.8 trillion won. The number of individuals who reported their offshore holdings grew 24.3 percent to 512.
Additionally, 541 Korean companies reported 51.3 trillion won of overseas financial holdings in the first half, a 30.7 percent increase in terms of number of companies and a 50 percent increase in the amount reported.
A majority of holdings were savings and deposit accounts, which took up 76.4 percent or 42.8 trillion won, while securities account trailed behind with 8.3 trillion won or 14.7 percent. The remaining 8.9 percent, or 5 trillion won, consisted of bond insurance and derivatives products.
Most individuals owned offshore financial holdings in Singapore, with 1.32 trillion won, followed by the United States with 1.29 billion won. Companies stashed holdings mostly in Hong Kong (16.5 trillion won) and China (6.2 trillion won).
The National Tax Service said it would continue to cooperate with foreign governments to track any unreported financial holdings.
BY LEE HO-JEONG [firstname.lastname@example.org]