Understanding Korea's Overseas Financial Account Reporting System(FATCA): Essential Guide for Residents and Corporations
The content from the National Tax Service of Korea (NTS) website details the "Overseas Financial Account Reporting System." Here's an English translation:
Overseas Financial Account Reporting System
This system requires residents or domestic corporations, whose combined balance in overseas financial accounts exceeds KRW 500 million (approx. USD 420,000) on any day at the end of each month, to report this information to their respective tax office annually by June. (Refer to Articles 52 to 57 and 62 of the International Tax Adjustment Act)
Reporters must meet all the following conditions:
Be a resident or domestic corporation, not exempt from reporting duty.
Hold accounts with overseas financial institutions for financial transactions (including banking, securities, derivatives, bitcoin exchanges, and other financial accounts).
The combined balance of assets in these accounts exceeds KRW 500 million on any day at the end of each month in the reporting year.
Assets in these accounts include cash, listed stocks (including depositary receipts), bonds, collective investment securities, insurance products, virtual assets(like a bit coin) and all other assets (like unlisted stocks and bonds).
The following are exempt from reporting:
Foreign residents who have lived in Korea for a total of less than 5 years in the 10 years before the end of the reporting year.
Overseas Koreans who have lived in Korea for less than 183 days in the year before the reporting year (2 years for reports of 2018 and 2019).
Public institutions, financial companies, etc., and those who can prove all their overseas financial account information through a related party.
Report the following information on the "Overseas Financial Account Report" form (Annex 45 of the International Tax Adjustment Act) from June 1 to 30 of the year following the reporting year, either by submitting it to the tax office or electronically via Hometax or Sontax:
Account holder's name, address, and other identity information.
Account number, name of the financial institution, and the total account balance for the month with the highest balance.
Information about joint account holders, real owners, and nominal holders.
Penalties for Non-Compliance
Fines are imposed for not reporting or underreporting:
Fines are calculated based on the unreported amount, up to 20% of the amount.
Additional fines for not proving or falsely proving the source of funds.
Public disclosure of personal details for underreporting over KRW 50 billion.
Criminal charges for underreporting over KRW 50 billion, including imprisonment or fines.
Amended and Late Reporting
Under-reporters can amend their reports before fines are imposed, with up to a 90% reduction in fines.
Late reporters can submit their information before fines are imposed.
Rewards up to KRW 2 billion are offered for providing crucial information leading to the detection of unreported or underreported overseas financial accounts.
Confidentiality of Reported Information
The confidentiality of reported overseas financial account information is strictly maintained under the International Tax Adjustment Act and the Tax Offender Punishment Act, except under specific circumstances outlined in the National Tax Basic Act.