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

Despite generating income in Korea, individual A, a foreign national, resided in country B overseas and failed to pay a large amount of taxes for an extended period, claiming to have no assets in Korea. In response, the National Tax Service requested country B’s tax authorities to investigate A’s asset status. Through information exchange, they confirmed hundreds of billions of won in overseas assets held by A, such as real estate, stocks, and bank accounts, and notified A accordingly. As a result, A, feeling pressure upon receiving the notification of the commencement of tax collection cooperation, sold part of their assets located in country B and is now making installment payments to the National Tax Service of Korea. Currently, most of the overdue taxes have been settled.

The National Tax Service announced on the 27th that, over the past nine months since Commissioner Lim Kwanghyun took office in July of last year, it has recovered five cases totaling 33.9 billion won in overdue taxes through collection cooperation with tax authorities in three countries. Among these, three cases involved high-value or habitual delinquents whose names have been made public.

Hanchangmok, Commissioner of the International Taxation Management Division at the National Tax Service, is explaining a case of overseas collection of delinquent taxes through international cooperation at the Government Complex Sejong on the 27th. National Tax Service

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Hanchangmok, Director of International Tax Management at the National Tax Service, stated, "These recent collection results account for the majority of the total collection cooperation achievements since 2015 (24 cases in 18 countries, totaling 37.2 billion won). This demonstrates that the National Tax Service's ongoing efforts to recover overseas concealed assets through international cooperation are now yielding substantial results. With dozens of cases currently in progress, we expect to recover additional overdue taxes in the hundreds of billions of won in the future."

According to the National Tax Service, cooperation with overseas tax authorities-specifically, the exchange of tax information and collection assistance-is essential for tracking and recovering overseas assets. This process allows the identification of asset types and locations and involves entrusting the compulsory collection of those assets to foreign tax authorities.

The National Tax Service currently conducts information exchange with 163 countries in response to requests on individual issues. For information on overseas real estate holdings, it collects data by grouping multiple delinquents and making bulk requests to countries where real estate ownership is suspected.

Looking ahead, the National Tax Service plans to significantly expand both the number of countries involved in information exchange and the range of assets covered, which will enable more sophisticated identification of concealed assets. In the case of virtual assets, 56 countries have signed an agreement to exchange crypto asset information, meaning that from 2027, transaction details from overseas exchanges will be provided annually. For overseas real estate, mutual exchange of ownership and transaction status will begin annually in 2030.

Types of collection cooperation vary according to the status of the delinquent, the amount owed, and the recovery method. Specific cases include: ▲ Korean nationals who liquidate domestic assets and businesses before moving their activities overseas; ▲ overseas Koreans or foreigners who primarily reside abroad but fail to pay one-off taxes incurred in Korea; and ▲ foreign athletes or businesspeople who leave Korea after losing their source of income.

Major Tax Collection Cooperation Cases. National Tax Service

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A wealthy foreign resident who had resisted payment by claiming to have no assets in Korea ultimately felt pressured by the tax collection cooperation and voluntarily paid their overdue taxes by selling assets located in their home country. In another case, a foreign professional athlete who earned a high salary in a Korean pro league but left the country without filing taxes and then joined an overseas pro league had their assets identified by the National Tax Service through the tax authorities in their home country. This athlete eventually paid the overdue taxes.

A National Tax Service official stated, "Building on these achievements and experiences, we will establish a comprehensive international cooperation system so that delinquents cannot find refuge anywhere in the world, thereby safeguarding our valuable national treasury. Furthermore, we are committed to realizing tax justice and creating a fair tax environment that earns the trust of the public."

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