Top tax officials of Korea, Cambodia agree on swift exchange of data to tackle cross-border tax crimes

National Tax Service (NTS) Commissioner Lim Kwang-hyun, second from right, listens as Kong Vibol, fourth from right, director general of Cambodia’s General Department of Taxation, speaks during a bilateral meeting of top tax administrators in Phnom Penh, Thursday. Courtesy of NTS

The top tax officials of Korea and Cambodia have agreed to cooperate in the “swift and accurate” exchange of data on assets linked to suspected cross-border tax crimes, the National Tax Service (NTS) said Sunday.

The NTS said a memorandum of understanding was signed by Commissioner Lim Kwang-hyun and Kong Vibol, director general of Cambodia’s General Department of Taxation, during Lim’s visit to Phnom Penh for the fifth round of a bilateral meeting of top tax administrators last week.

The agreement is aimed at “further materializing and documenting” the two countries’ previous deal, reached verbally in January in Seoul, on cross-border tax offenses and the exchange of related information, the NTS said.

In particular, last week’s deal came after Cambodia-based online scams targeting Korean nationals, many of them students and job seekers, with illicit gains from the victims laundered out of the Southeast Asian country.

“The two sides agreed that sharing transaction data on the suspects in a swift and accurate manner is essential to combat increasingly sophisticated offshore tax evasion, including the concealment of money earned from crimes and laundering it through virtual assets,” the NTS said.

It added agreement addresses key issues discussed by Lim and Kong, including facilitating efforts in the provision of tax data and the execution of tax offense investigations.

The NTS went on to say that the two top tax administrators, by sharing their experiences, “affirmed that egregious tax evasion must be dealt with strictly.”

The NTS said it drew strong interest from the Cambodian tax authorities as it shared its knowledge and expertise in tax offense investigations, detailing its enforcement methods.

These included countermeasures against the destruction of accounting records to eliminate evidence and the use of overseas shell companies to disperse income, as well as follow-up procedures, including criminal complaints.

Lim also conveyed a request for support related to tax policies for Korean companies operating in Cambodia, after holding a roundtable earlier with business representatives.

The businesses, from the finance, construction and other sectors, shared various tax-related difficulties, such as delays in value-added tax refunds.

“Commissioner Lim listened to them and discussed possible solutions, which he relayed to Director General Kong, requesting maximum support from the Cambodian tax authorities,” the NTS said, adding that Kong, in turn, promised active cooperation.

“The NTS will continue to listen to the challenges faced by Korean companies operating abroad, develop more practical tax support measures and promote tax diplomacy that resonates with taxpayers’ perspectives,” it said.