Wealthy Foreign Resident Who Claimed "No Assets in Korea" Ultimately Pays Taxes After Selling Assets in Home Country

National Tax Service Recovers 33.9 Billion Won in Overdue Taxes Through International Cooperation
Information Exchanged With 163 Countries... Plans to Greatly Expand Target Countries and Asset Types
Virtual Asset Data to Be Exchanged Starting in 2027, Overseas Real Estate Information From 2030

Individual A, who holds a foreign nationality, generated income in Korea but resided in country B overseas and failed to pay a large amount of taxes for an extended period, claiming a lack of assets in Korea. In response, the National Tax Service requested an information exchange with the tax authorities of country B to investigate A’s assets, confirming hundreds of billions of won worth of overseas assets such as real estate, stocks, and bank accounts, and notified delinquent taxpayer A of these findings. Ultimately, shortly after receiving the notice of the commencement of collection cooperation, A, feeling pressured, sold a portion of assets located in country B and began paying the overdue taxes to the National Tax Service of Korea in installments. As of now, most of the delinquent taxes have been paid.

The National Tax Service announced on the 27th that, during the nine months since Commissioner Lim Gwanghyeon took office in July of last year, it has recovered overdue taxes totaling 33.9 billion won through five cases of collection cooperation with tax authorities in three countries. Among these, three cases involved individuals whose names were disclosed due to large and habitual tax delinquencies.

Hang Changmok, Director of International Tax Administration at the National Tax Service, is explaining cases of overseas collection of delinquent taxes through international cooperation at the Government Complex Sejong on the 27th. National Tax Service

Hang Changmok, Director of International Tax Administration at the National Tax Service, stated, "These recent collection results account for the majority of the total cooperation outcomes achieved since 2015 (24 cases in 18 countries, totaling 37.2 billion won), demonstrating that the National Tax Service’s recent focus on recovering overseas hidden assets through international cooperation is beginning to yield substantial results. Dozens more cases are currently underway, so it is expected that hundreds of billions of won in additional overdue taxes will be recovered in the future."

According to the National Tax Service, tax administration cooperation with overseas tax authorities—specifically, the exchange of tax information and cooperation in collecting overdue taxes—is essential for tracking and recovering offshore assets. Through these processes, the location and category of overseas assets are identified, and the forced collection of these assets is delegated to foreign tax authorities.

The National Tax Service exchanges information with 163 countries on specific issues upon request from the respective countries. When it comes to overseas real estate holdings, the agency collects information by submitting bulk requests to countries suspected of holding assets on behalf of multiple delinquent taxpayers.

Going forward, the National Tax Service plans to significantly expand both the number of countries involved in information exchanges and the range of assets subject to exchange, resulting in more precise identification of hidden assets. Regarding virtual assets, 56 countries have signed agreements for the exchange of cryptoasset information, allowing Korea to receive annual transaction data from overseas exchanges starting in 2027. For overseas real estate, mutual exchange of annual ownership and transaction status will begin in 2030.

There are various types of collection cooperation, differing by the status of the delinquent taxpayer, the amount owed, and the method of recovery. Specifically, these include: ▲ Korean nationals who liquidate domestic assets and businesses before relocating overseas ▲ Overseas Koreans or foreigners who mainly reside abroad and evade one-time taxes generated in Korea ▲ Foreign athletes or businesspeople who leave the country once their source of income in Korea disappears.

Major Collection Cooperation Cases. National Tax Service

A wealthy foreign resident who had previously resisted payment by claiming a lack of assets in Korea ultimately felt pressured by the collection cooperation and voluntarily paid overdue taxes after selling assets located in their home country. In another case, the National Tax Service tracked down the assets of a foreign professional athlete who received a high salary playing in the Korean pro league, failed to report taxes, then left the country and continued their career abroad. The athlete ultimately paid the delinquent taxes after the National Tax Service confirmed the asset information through the tax authorities of their home country.

An official from the National Tax Service stated, "Building on these accomplishments and experiences, the National Tax Service will establish a thorough international cooperation system without borders, leaving no place in the world for delinquent taxpayers to hide, in order to protect precious national finances. Furthermore, we will strive to realize tax justice and create a fair tax administration environment trusted by the public."

This content was produced with the assistance of AI translation services.