|Korea: Offshore Tax Evaders Fined|
By Lee Ho-jeong
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Korean tax authorities on May 25 disclosed that it had uncovered local tax evasion cases involving Switzerland, Hong Kong and Singapore for the first time and had slapped fines totaling 339.2 billion won ($266.6 million).
The National Tax Service is cracking down on offshore tax evasion by companies that are trying to hide earnings by making false declarations on overseas investments or failing to report profits made abroad.
In the latest case, the tax authorities said they uncovered four companies and owners that had evaded a total 622.4 billion won in taxes following a six-month investigation. Their identities were not disclosed.
Those involved in the tax evasion cases had created false overseas investment funds operated by shell companies that bought high-end property or placed money in secret bank accounts in Switzerland, Hong Kong and Singapore after manipulating sales figures.
The agency said it had found 14 overseas accounts containing a total of $130 million as of the end of 2009.
“Until now, we suspected those who evaded taxes had offshore accounts in these three countries, but this is the first time we found evidence of their existence,” said a tax agency official.
The new investigation is the result of a global agreement reached at the G-20 meeting in London in April 2009 that forced offshore tax havens to disclose secret bank accounts if governments were able to provide evidence of tax evasion by their citizens to local authorities.
After the global agreement went into effect, the National Tax Service set up a special task force team to hunt down offshore tax evaders.
“No matter how long it takes, we will track down those who evade taxes offshore and strictly apply penalties regardless of their social status,” said Lee Hyun-dong at the tax agency.
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Published on our website on June 1, 2010