Korea, Australia to strengthen joint crackdown on offshore tax evasion

National Tax Service (NTS) Commissioner Lim Kwang-hyun, left, holds a commemorative plaque with Australian Taxation Office Commissioner Rob Heferen after signing a memorandum of understanding on bilateral cooperation to combat offshore tax evasion, during the 54th Study Group on Asia-Pacific Tax Administration and Research meeting held in Brisbane, Australia, from Tuesday to Thursday. Courtesy of NTS

Top tax officials from Korea and Australia have agreed to strengthen cooperation in their efforts to crack down on tax evaders who hide money and assets offshore or falsely report income from abroad, the National Tax Service (NTS) said Thursday.

The agreement was reached between NTS Commissioner Lim Kwang-hyun and Rob Heferen, commissioner of the Australian Taxation Office, during Lim’s visit to Brisbane, Australia, for the 54th Study Group on Asia-Pacific Tax Administration and Research (SGATAR) meeting.

Korea and Australia are among 19 member states of SGATAR, a consultative body for top tax administrators in the Asia-Pacific region. This year’s annual gathering was held from Tuesday to Thursday.

National Tax Service (NTS) Commissioner Lim Kwang-hyun, front row second from right, poses with Australian Taxation Office Commissioner Rob Heferen, front row fourth from right, and other top tax officials from member states of the Study Group on Asia-Pacific Tax Administration and Research (SGATAR) during the 54th SGATAR meeting held in Brisbane, Australia, from Tuesday to Thursday. Courtesy of NTS

“Commissioners Lim and Heferen held a bilateral meeting and signed a memorandum of understanding (MOU) to enhance administrative efforts on offshore tax evasion,” the NTS said.

The agreement allows both countries to request assistance from each other in collecting unpaid taxes from offshore tax evaders. The enforcement actions include seizing or auctioning assets located in the other country.

“The MOU outlines how the two agencies will communicate and take enforcement actions when requested,” the NTS added, saying the agreement is expected to help “establish a more practical system for tracking down offshore assets and recovering unpaid taxes.”

In a statement shared by the NTS, Lim described the agreement as “a major step toward stopping people from using international borders to escape their tax responsibilities.”

Heferen also emphasized the importance of cross-border cooperation to deal with complex tax evasion cases.

Meanwhile, Lim presented Korea’s efforts to upgrade its tax system using artificial intelligence (AI) during the SGATAR meeting.

He explained that AI tools will support the detection of tax evasion and allow the government to offer free tax consulting services to the public.

He highlighted the NTS’ plan to use generative AI trained on vast amounts of data, including tax laws, official interpretations and court rulings, to provide more accurate and accessible support.

The agency aims to develop a system that can automatically detect signs of tax evasion based on minimal input data, by learning from past tax audit cases.

The NTS commissioner also met with tax officials from other countries to request support for Korean businesses operating overseas, especially in resolving double taxation issues.

The NTS said it will continue working with global partners to promote fair taxation and create a stable international tax environment for Korean companies abroad.