No. of foreign entities on rise in Korea

By Lee Kyung-min

The number of foreign entities operating in Korea is on a steady rise amid growing global trade, according to the nation's tax agency, Monday.

In its latest tax data review report, the National Tax Service said the number of foreign corporate entities stood at 8,517 in 2017, a 5.7 percent increase from 8,056 in 2013. The number was 8,513 in 2016, 8,380 in 2015 and 8,095 in 2014.

It was part of the agency's annual tax review which analyzed corporate tax, value-added tax, consumption tax and tax on foreign entities. The amount of tax levied in detail will be released in December.

The number of foreign branches in Korea also increased to 1,907 in 2017, a 1.4 percent increase from a year earlier.

Also on the rise was the number of foreign liaison offices in Korea which increased to 1,736 in 2017, a 2.6 increase percent from a year earlier.

By sector, wholesale businesses accounted for about a third, or 36.2 percent, followed by services (28.5 percent) and manufacturing (20.3 percent).

/The increase rate was the steepest in the service industry followed by wholesale, with each having risen 12.1 percent and 10.8 percent, respectively, from four years earlier.

By country, a quarter, or 24.3 percent, was Japanese entities while the U.S. accounted for 18.6 percent followed by China (8.5 percent), Singapore (5.9 percent), and Hong Kong (5.7 percent).

Of the five countries, entities from China, Hong Kong and Singapore in Korea are on the rise, while those of Japan and the U.S. decreased.

The tax agency reported that overseas accounts held by corporations and individuals reached about 66.4 trillion won ($59 billion) in 2018, up 8.7 percent from 2017.

Of the total, 59.5 trillion won belonged to corporations, accounting for 89.6 percent, while the remaining 6.9 trillion won belonged to private individuals.

Japanese entities held the largest amount in overseas accounts (12.8 trillion won), followed by Chinese entities (11.4 trillion won), United Arab Emirates (3.5 trillion won) and Hong Kong (2.7 trillion won).

For private individuals, the largest amount was held in accounts in the U.S. (2.8 trillion won), followed by Singapore (1.2 trillion won), Japan (1.1 trillion won), Hong Kong (816 billion won) and Switzerland (160 billion won).

Meanwhile, 2,668 domestic corporate entities filed corporate income surpassing 100 billion won in 2017, up 4.7 percent from a year earlier.

About two-thirds, or 2,439 of them, were located in Seoul, Incheon or surrounding Gyeonggi Province.

The agency received 875 billion won in cash from tax dodgers in 2017, a 9.9 increase from a year earlier.

High-income earners or asset holders had managed to avoid over 50 million won each in taxes.

It received 391 tip-offs on hidden assets in 2017, a 38.7 percent increase from a year earlier, with the reward amount also increasing to 1.4 billion won, up 62.7 percent from a year earlier.