South Korea and Hong Kong have reached an agreement to share tax information, particularly on those South Koreans suspected of having undeclared funds in Hong Kong.
The South Korean Ministry of Strategy and Finance announced the reaching of the deal between the two countries' tax authorities – Hong Kong's Inland Revenue Department (IRD) and South Korea's National Tax Service (NTS) – under which South Korea will obtain access to account information held by financial institutions in Hong Kong.
The agreement comes at a time when, in a bid to reduce the incidence of tax evasion, the NTS is proposing to impose heavier fines on those South Korean residents who are found to hold substantial unexplained financial accounts in overseas jurisdictions. South Koreans with overseas financial accounts worth more than KRW1bn (USD924,000) would be obligated to report the assets, and to explain the sources of the funds, or pay at least a 10 percent fine.
The deal between the IRD and the NTS will require parliamentary approval in both countries before it can be officially signed, but it is hoped that it will enter into force next year..
TAGS: individuals | compliance | Finance | tax | tax information exchange agreement (TIEA) | tax compliance | tax authority | agreements | Hong Kong | Korea, South | Tax
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