Korea’s tax authorities said Wednesday they have launched a full-fledged investigation into 30 corporations and individuals on suspicions of offshore tax evasion.
The National Tax Service said the probe would target companies and individuals who are suspected of having concealed their wealth using offshore paper companies in the British Virgin Islands and other tax havens.
“We will conduct unprecedented intense tax investigations into companies and members of conglomerate families,” said Han Sung-hee, NTS assistant commissioner for investigation. But the agency did not disclose the names of suspects.
“With the enforcement of the U.S.-led Foreign Account Tax Compliance Act starting this year, we have access to a large amount of information about foreign accounts for investigations,” Han added.
He stressed that it will be “close to impossible to hide properties and income from assets in foreign territories.”
Han Sung-hee, assistant commissioner for investigation of the National Tax Service, briefs on offshore tax evasion in the NTS press room in Sejong Government Complex on Wednesday. (Yonhap)
The NTS urged taxpayers who failed to report the correct amount of foreign-based assets to turn themselves in by March, the deadline for the temporary grace period.
The NTS noted four common methods of overseas tax evasion by companies or their owner families, including setting up paper companies to hoard slush funds through illegal transactions, or sending operational funds to paper families in an overseas tax haven under the guise of exports.
Some pretend to be foreign institutional investors here and send investment profits to paper companies abroad. Some were caught bringing in underreported income from their overseas assets under borrowed names of their executives, according to NTS officials.
Observers suggest that the tax agency’s crackdown on offshore tax evaders is in line with the government’s effort to establish fair taxation rules and expand the overall revenue base to increase the budget for social welfare programs being pushed by President Park Geun-hye.
By Chung Joo-won (email@example.com