Illegal wealth transfers soar in recent years: data

The amount of illegal offshore wealth transfers by Korean businesses and individuals has jumped in recent years amid the government's intensifying efforts to crack down on tax evasion attempts, data showed Tuesday.

According to the data by the Korea Customs Service, it has caught 22 cases of illegal wealth transfer attempts in 2010 aimed at evading taxes by using foreign tax haven countries. It compared with 13 cases caught in 2007.

They involved a total of 152.8 billion won ($132.8 million) in 2010, up from 16.6 billion won in 2007, the data showed.

During the same period, the number of money laundering cases also jumped from 6 to 43. The money involved came to 92.4 billion won, up from 8.3 billion won.

A recent report written by a former McKinsey & Company economist drew attention to the offshore tax evasion issue here by placing Korea third in terms of money being transferred to foreign tax haven countries over the past four decades.

Industry data also showed that the number of "paper companies" established in tax haven countries by local businesses totaled 4,875 at the end of last year.

In particular, the top 30 conglomerates in Korea currently hold 47 paper companies in 44 regions categorized as tax havens by the Organization for Economic Cooperation and Development, according to Chaebul.com, a conglomerate research firm.

The data come as local tax agencies are beefing up crackdowns on offshore tax evasion by conglomerates and high-income earners.

In a related move, the government is pushing to increase global cooperation to crack down on such tax evasion and enforce fair taxation policies.

Korea has so far signed anti-double taxation pacts with 77 countries and agreed to exchange tax-related information with tax authorities in 15 countries and regions. (Yonhap)