According to a report in the Financial Times, Ireland, Labuan, Belgium and the Netherlands are among the countries and offshore territories named on the list.

Under new laws set to be introduced from July 1, 2006, investors from these countries will be subject to withholding taxes of up to 27.5% on South Korean income, including that derived from interest, dividends, and capital gains.

The move is the latest step by the South Korean government to clamp down on what it considers as aggressive tax avoidance by foreign entities.

Last year, five foreign funds were investigated and subsequently fined a total of 215 billion won (US$212 million) by the National Tax Service for tax evasion. Lone Star reportedly faced the largest fine at 140 billion won.

In November Lee Ju-sung, head of the NTS, expressed concern to Zainol Abidin Rashid, his Malaysian counterpart, over "Malaysia's tax haven of Labuan in connection with the NTS's investigation into foreign funds".

Then, in January, the NTS revealed that several foreign financial institutions were included on a list containing more than 100 firms which are to be investigated for alleged breaches of local tax regulations.

According to the NTS, some foreign companies have managed to cut their tax bills "despite huge profits".

However, analysts fear that the policy may backfire on the South Korean government, as foreign investors pull out of the country in search of more hospitable treatment in rival financial centres in the Asia Pacific region.