The National Tax Service (NTS) launched its first investigation of undeclared foreign bank accounts.
According to the NTS on September 1, it has started to investigate 47 people suspected of having undeclared offshore accounts worth over 1 billion won (US$908,000).
The reporting system for undeclared accounts held abroad is to prevent tax evasion through secret transactions by declaring offshore accounts worth more than 1 billion won (US$908,000) owned by domestic residents or domestic corporations to the NTS.
In June, the government body got reports of offshore accounts worth 22.8 trillion won (US$20.6 billion) from 678 people. 301 people and 368 corporate bodies voluntarily reported 2.5 trillion won (US$2.27 billion) and 20.3 trillion won (US$18.4 billion) each. After conducting an analysis, it found several offshore accounts with more than 1 billion won (US$908,000), which prompted the agency to make a list of 47 people with undeclared accounts.
It turned out that most of those accounts were under the name of mid-sized companies, or those related to the owners of such firms. It was also revealed that secret incomes, including rebates from overseas local subsidiaries, were hidden in borrowed-name bank accounts under the names of local employees. Apparently, people received money by falsely declaring that paper companies provided service, and sent the money to borrowed-name bank accounts under their own names.