By Kim Jae-won
Staff Reporter
The National Tax Service (NTS) launched a 15-member taskforce Wednesday to crack down on offshore tax evaders and to monitor illegal capital outflow.
The team called the "Overseas Tax Evasion Report Center" will monitor cross-border tax evasion.
"We launched the center to crack down on overseas tax dodging cases," Park Yun-jun, assistant commissioner for international taxation, said at a press conference in Seoul, Wednesday. The NTS has not made public who is heading the center.
The unit will collect and analyze information on suspicious investments offshore, with the NTS also expanding its network with foreign agencies to share information on tax crimes.
Special monitoring of firms opening paper companies in tax havens overseas and the remittance of money to buy real estate and spending on golf and gambling will also be carried out.
Park pointed out that the team was launched to keep up with changes in international tax transparency trends.
"Traditional tax havens such as Liechtenstein, Luxemburg, and Switzerland have declared that they will provide tax information. This is the biggest change in international taxation since World War II," the official said.
Liechtenstein has announced that it has been removed from a tax haven "gray list" after taking steps to cooperate with foreign countries on tax criminals.
The Group of 20 nations vowed to impose sanctions on all financial centers that did not cooperate on taxation. Switzerland, Luxemburg and Austria are among the other centers that have already been removed from the list.
Korea has already signed treaties with 74 countries on exchange of information on taxation with the exception of Switzerland.
But the Korean government plans to ink a pact with the central European country.
"The Ministry of Strategy and Finance plans to sign a deal with Switzerland," Park said.
A high-profile U.S. lawsuit against Swiss giant UBS AG led the bank to agree earlier this year to promise to reveal the names of 4,450 American-held accounts.
Hidden property worldwide is estimated to be worth from $2 trillion to $11.5 trillion, according to the Organization for Economic Cooperation and Development. The U.S. Congress reported the loss of tax to the country to be about $100 billion per year.
Recently, Hyosung Group has been under investigation over allegations it created a slush fund through its subsidiaries in the United States.
The children of the owner, Cho Suck-rae, are said to have held real estate overseas. But the tax office said it was not targeting any specific firm or person.