Report of “offshore financial account” (effective from December 27, 2010)

If a Korean resident (including a foreigner who has address or abode in Korea for more than 5 years in aggregate during the past 10 years) or a Korean company owns the “offshore financial account” opened in foreign countries, it is obligated to report the detailed information on the account to the Korean tax authority. The offshore financial account which is subject to the report is the account having more than Won 1 billion for at least one day of the fiscal year.

The detailed information of “offshore financial account” includes 1) information on the owner of the account such as name, address, etc., 2) the account information such as the account number, name of the financial institution and the highest amount of the daily ending balance during a fiscal year, 3) information on the beneficial owner in case the account is held by a nominal owner, and 4) information on the joint owners in case the account is jointly held by two persons or more.

The owner of the offshore financial account is required to submit the detailed information on the account to the Korean tax authority from June 1 to June 30 of the following year (i.e. from June 1 to June 30, 2011 for FY 2010).

A fine would be imposed if the report is not submitted by the due date.