Overseas Financial Accounts Exceeding 500 Million Won Must Be Reported by June 30... Overseas Cryptocurrency Also Included

Individuals holding overseas financial accounts with balances exceeding 500 million won are required to report them by the end of next month. Overseas cryptocurrency holdings are also subject to this reporting requirement.

The National Tax Service announced on May 29 that residents and domestic corporations must report information on all overseas financial accounts held in 2024 if the combined balance of cash, stocks, bonds, and virtual assets in these accounts exceeds 500 million won at any point at the end of any month. The reporting deadline is June 30.

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A resident refers to an individual who has a registered address or has resided in Korea for 183 days or more. A domestic corporation is defined as a corporation with its headquarters, main office, or actual place of business management located in Korea. In the case of joint-name overseas financial accounts, each joint account holder must report the account information separately.

The National Tax Service plans to send notification letters via mobile and mail to taxpayers who are likely to have overseas financial accounts exceeding 500 million won. Even if a report was filed last year, a new report must be submitted if the balance of overseas financial accounts in 2024 exceeds 500 million won.

In particular, since overseas virtual asset accounts have been included in the overseas financial account reporting requirements starting with the 2023 reporting period, the National Tax Service has worked with domestic virtual asset service providers to provide guidance on the overseas financial account reporting system.

The National Tax Service is conducting thorough verification of violations of overseas financial account reporting obligations by analyzing cross-border financial information exchange data and data collected from other agencies. Whistleblowers who provide critical information regarding unreported overseas financial accounts may receive rewards of up to 2 billion won.

For violations of the overseas financial account reporting obligation, a penalty of 10% of the unreported (or underreported) amount will be imposed, up to a maximum of 1 billion won. If the unreported (or underreported) amount exceeds 5 billion won, criminal prosecution and public disclosure of names may also apply.

Those subject to the reporting obligation can file their reports on overseas financial accounts from June 1 to June 30 using the National Tax Service's Hometax and Sontax platforms. It is also possible to report by submitting the required forms in person at the tax office with jurisdiction over the taxpayer's place of residence.

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