Included in the target of reporting for overseas financial accounts… ‘Bomb’ fine for violating obligations
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Virtual assets of delinquents recently seized by the National Tax Service are virtual currencies handled by domestic exchanges, and users of overseas exchanges have been left out of this measure. This is due to the limitation of being unable to enforce compulsory collection (old disposition for arrears) at overseas exchanges. Income (other income) of virtual assets will be taxed next year, but there is also a concern that overseas exchanges will become taxable blind spots.
According to the National Tax Service on the 16th, holders will be obligated to report from next year so that foreign virtual assets do not become a means of evasion.
This is due to the addition of foreign virtual assets to the obligation to report overseas financial accounts due to the amendment of the’International Tax Adjustment Act’ at the end of last year.
Accordingly, from next year, domestic residents or domestic corporations whose total balances in overseas financial accounts, including virtual assets using overseas exchanges, exceed 500 million won on any of the last days of each year, must report to the competent tax office in June of the following year.
As virtual assets held by using foreign exchanges or through individual transactions eventually depend on the taxpayer’s sincere reporting, severe sanctions are imposed on those violating the reporting obligations, and the informant reward system is also operated.
Violation of the obligation to report overseas financial accounts will result in a fine of up to 20% of the unreported or underreported amount. If the unreported amount exceeds 5 billion won, it is subject to criminal prosecution and list disclosure review.
Informants who provide important information to detect violations of the obligation to report overseas financial accounts will be paid a reward of 5 to 15% of the fine or fine, up to a limit of 2 billion won.
An official from the National Tax Service said, “It is difficult for the government to identify virtual assets that use overseas exchanges, and even if they do find out, there is a limit to compulsory collection such as seizure.”
/ Sejong = Reporter Hwang Jeong-won [email protected]
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