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CUSTOMS ACT

 

Gov't to monitor wealth transfer abroad
-FOR TEST-
The government said Monday it will revamp the country’s foreign currency transaction
policy to prevent firms from illegally transferring wealth overseas.
The Ministry of Strategy and Finance said it will make it obligatory for domestic
enterprises to report the amount of their investment into their overseas subsidiaries. It
also said it will expand its information-sharing with foreign financial and tax watchdogs.
The move comes amid rising concerns over the illegal transfer of assets by Korean
businesses and individuals.
“Under the current law, it was possible for firms to set up paper companies and make
false reports on their businesses,it said.
Under the new measures, firms will have to submit information on the amount of
investments as well as earnings by their subsidiaries every year. The firms will also be
required to report the amount of assets owned by their branch offices when they are
shut down.
The ministry will share such financial information with the Financial Supervisory Service
(FSS), National Tax Service (NTS), and Korea Customs Service (KCS), it said.
The government will ask Koreans with permanent residence status in other countries to
report earnings from their overseas investments.
Permanent residents of other countries have been exempt from bringing in money to
Korea, although a number of them actually live in the country, the ministry said.
“We thought fair and equal treatment of our citizens with those of permanent residents
of other countries is crucial,it said. “But at the same time, it was important to prevent
permanent residents from transferring money out of the country illegally.
According to the Tax Justice Network, a London-based civic organization, the amount
that Koreans moved to tax havens from 1970 to 2010 totaled $779 billion, the third
largest amount following China and Russia. That’s more than twice the government
budget for this year.
The Park Geun-hye administration has been pushing to crack down on tax dodgers to
collect tax and supplement the government’s welfare spending that requires trillions of
won.