The National Tax Service (NTS) of South Korea is set to conduct simultaneous tax investigations with local tax authorities in Europe targeting high-value tax delinquents who have hidden assets abroad. This initiative marks a significant step in international cooperation aimed at recovering unpaid taxes through tracking overseas hidden assets.
On May 14, the NTS announced that Im Kwang-hyun, the head of the agency, visited Hungary, Belgium, and the United Kingdom to sign memorandums of understanding (MOUs) for tax collection cooperation and discuss plans for simultaneous tax investigations of high-value delinquents.
The discussions focused on expanding the tax collection cooperation network to Europe to facilitate the recovery of tax debts from individuals with overseas assets. The NTS plans to request cooperation from foreign tax authorities to conduct simultaneous tax investigations when they identify hidden assets abroad.
Simultaneous tax investigations involve tax authorities from two countries conducting concurrent investigations on individuals suspected of tax evasion who have economic ties in both nations. The process allows for the exchange of tax information obtained during the investigations, enabling the identification of hidden assets abroad.
The NTS emphasized the need for such cooperation by sharing examples of tax delinquents who have relocated their activities to Europe. For instance, foreign professional athletes who have failed to pay taxes while playing in South Korea have been targeted by foreign tax authorities for asset seizure in their respective countries.
Another case involves a domestic habitual tax delinquent who has been operating businesses under false names in various countries to evade taxes. Additionally, instances of receiving technology fees through accounts held by overseas corporations without reporting taxes in any country have also been uncovered.
The NTS plans to request rapid exchange of tax information with foreign counterparts regarding these cases and, if necessary, conduct simultaneous tax investigations to uncover hidden assets and recover unpaid taxes through cooperative efforts.
During meetings with tax officials from various countries, Im stated, "Swift tax collection cooperation based on legitimate enforcement authority is essential," urging active collaboration.
The NTS expects that this agreement will accelerate efforts to recover overseas assets. With a system in place for simultaneous responses to cross-border tax evasion and delinquency, the effectiveness of overseas tax collection, which has been criticized for its limitations, is anticipated to improve.
As global asset mobility increases, leading to a rise in tax evasion by high-value delinquents fleeing abroad, this simultaneous tax investigation framework is expected to serve as a means to extend international enforcement of tax collection.
* This article has been translated by AI.
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