By Choi Kyong-ae
Seoul and Washington will exchange data on taxpayers' bank accounts every September to bolster their tax revenue, the National Tax Service (NTS) said Wednesday.
"If we regularly exchange data on taxpayers' bank accounts with the U.S., it will help the tax authorities crack down on attempts at offshore tax evasion," said an official at the offshore compliance division of NTS. "The move is in line with the government's drive to bring the underground economy into the open for taxation."
The NTS aims to collect 210.1 trillion won in tax revenue this year. Last year, it targeted 204.9 trillion won but achieved 195.7 trillion won.
The U.S. introduced the Foreign Account Tax Compliance Act (FATCA) in 2010 to seek cooperation from countries and put it into effect in July last year. The U.S. Internal Revenue Service (IRS) has stepped up efforts to collect taxes from taxpayers living outside the country by penalizing those who fail to pay, as well as those who help taxpayers underreport or avoid taxes.
Under the FATCA deal, Seoul is required to send all financial transaction data of U.S. citizens who have bank accounts worth more than $50,000 and U.S.-based businesses which own accounts in Korean territory worth over $250,000 to Washington, said the official.
If Korean banks and other financial companies operating in the U.S. do not offer the data under the multilateral deal, they have to pay 30 percent of their income earned in the U.S. as a penalty, he said, asking not to be named.
But the official didn't provide the value of corresponding bank accounts that Washington is required to send to Seoul.
As of the end of February, the U.S. has signed the FATCA contract with 110 countries, including tax havens such as Switzerland, the Bahamas, the British Virgin Islands, and the Caymen Islands, and the membership is on the rise, he said.
Starting July 1 last year, U.S. citizens or Green Card holders are required to fill out a new form when they open an account at financial firms in Korea. A person who comes from the U.S. has to specify whether he is U.S. citizen, Green Card holder, or U.S.-based taxpayer to have an account at a Korean bank, according to the Financial Services Commission (FSC).
As for U.S. natives and Korean-Americans who reside in Korea but have the right to vote for a U.S. President, Korean financial firms have to report the income of U.S. citizens, their account balances and other financial information to the NTS, FSC said.
"We are establishing a system which meets requirements of the FATCA deal to send the information we collect on wealthy U.S. account holders in Korea to IRS every September," said another NTS official.
Seoul and Washington will exchange data on taxpayers' bank accounts every September to bolster their tax revenue, the National Tax Service (NTS) said Wednesday.
"If we regularly exchange data on taxpayers' bank accounts with the U.S., it will help the tax authorities crack down on attempts at offshore tax evasion," said an official at the offshore compliance division of NTS. "The move is in line with the government's drive to bring the underground economy into the open for taxation."
The NTS aims to collect 210.1 trillion won in tax revenue this year. Last year, it targeted 204.9 trillion won but achieved 195.7 trillion won.
The U.S. introduced the Foreign Account Tax Compliance Act (FATCA) in 2010 to seek cooperation from countries and put it into effect in July last year. The U.S. Internal Revenue Service (IRS) has stepped up efforts to collect taxes from taxpayers living outside the country by penalizing those who fail to pay, as well as those who help taxpayers underreport or avoid taxes.
Under the FATCA deal, Seoul is required to send all financial transaction data of U.S. citizens who have bank accounts worth more than $50,000 and U.S.-based businesses which own accounts in Korean territory worth over $250,000 to Washington, said the official.
If Korean banks and other financial companies operating in the U.S. do not offer the data under the multilateral deal, they have to pay 30 percent of their income earned in the U.S. as a penalty, he said, asking not to be named.
But the official didn't provide the value of corresponding bank accounts that Washington is required to send to Seoul.
As of the end of February, the U.S. has signed the FATCA contract with 110 countries, including tax havens such as Switzerland, the Bahamas, the British Virgin Islands, and the Caymen Islands, and the membership is on the rise, he said.
Starting July 1 last year, U.S. citizens or Green Card holders are required to fill out a new form when they open an account at financial firms in Korea. A person who comes from the U.S. has to specify whether he is U.S. citizen, Green Card holder, or U.S.-based taxpayer to have an account at a Korean bank, according to the Financial Services Commission (FSC).
As for U.S. natives and Korean-Americans who reside in Korea but have the right to vote for a U.S. President, Korean financial firms have to report the income of U.S. citizens, their account balances and other financial information to the NTS, FSC said.
"We are establishing a system which meets requirements of the FATCA deal to send the information we collect on wealthy U.S. account holders in Korea to IRS every September," said another NTS official.
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