Taxpayers with Overseas Accounts Over 500 Million Won Must Report by End of Month

View of the National Tax Service building in Sejong City [Photo by Yoo Dae-gil]

Taxpayers holding overseas financial accounts with balances exceeding 500 million won must report this information to the National Tax Service (NTS) by the end of June. Starting this year, overseas trusts are also included in the reporting requirements.

On June 4, the NTS announced that it will accept reports on overseas financial accounts and trusts from residents and domestic corporations that held such accounts or established and maintained overseas trusts last year until June 30. As this is the first year for the overseas trust reporting obligation, the NTS urged taxpayers who have set up trusts abroad to pay close attention.

Taxpayers required to report are those whose total balance of overseas financial accounts exceeded 500 million won on any day at the end of each month last year. Reportable assets include savings accounts, stocks, bonds, investment securities, insurance, and virtual assets. Accounts opened with overseas virtual asset service providers are also subject to reporting.

The newly implemented overseas trust reporting system does not have a separate reporting threshold. Residents and domestic corporations that establish trusts abroad similar to those under domestic trust law or transfer assets to such trusts must report, regardless of the amount involved. This is a key distinction from the overseas financial account reporting, which has a specific threshold.

The NTS is sending notifications via mobile or mail to approximately 27,000 taxpayers identified as likely required to report. Taxpayers can file their reports electronically through the Home Tax and Mobile Tax services, and even those who do not receive a notification should verify their reporting obligations and comply by the deadline.

After the reporting period ends, the NTS plans to conduct thorough investigations into potential non-reporters using data from automatic exchanges of financial information between countries, information collected from other agencies, and field data. Failure to report overseas financial accounts or trusts, or underreporting, may result in a fine of 10% of the unreported or underreported amount. Notably, if the unreported amount for overseas financial accounts exceeds 5 billion won, it may lead to criminal prosecution and inclusion on a public list.

To combat the concealment of overseas assets and tax evasion, the NTS is promoting a whistleblower program. Individuals providing significant information about unreported overseas financial accounts may receive rewards of up to 2 billion won, while those reporting tax evasion through overseas trusts could earn up to 4 billion won.

* This article has been translated by AI.

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