Korea and the United States agreed on the regular collection of financial information as to taxpayers with the respective nationalities owned by each other’s financial institutions.
The Ministry of Strategy & Finance announced on June 10 that Vice Minister Ju Hyeong-hwan signed an automatic tax information exchange agreement to this end with U.S. Ambassador to South Korea Mark Lippert.
According to the agreement, the national tax offices of both countries will exchange, every September, the bank account information as of the end of the previous year reported by financial institutions. In addition, Korea is to provide the United States with information as to personal bank accounts with a balance of more than US$50,000 and information as to corporate bank accounts with a balance of over US$250,000. The United States is to send Korea banking account information related to source income and bank accounts each with an annual interest of more than US$10.
“This automatic exchange agreement is the first one of its kind that is signed between Korea and another country, and is expected to help tracking offshore tax evasion by allowing the yearly exchange of information,” the ministry explained, adding, “Also, this agreement is likely to add to the effectiveness of the international banking account report that is implemented for the prevention of offshore tax evasion.”