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Tax Agents to Be Deployed in 15 O’seas Locations

Posted November. 08, 2010 11:10,   


The National Tax Service is pushing to station intelligence agents at 15 locations worldwide to crack down on tax evasion by companies and individuals.

The agency seeks to station officials specifically to catch tax evaders at major overseas “tax havens.” To this end, they will secretly secure data on the financial accounts of Korean companies and individuals from intelligence “black markets” and other sources.

The Strategy and Finance Committee of the National Assembly said Sunday that the tax watchdog requested 9.08 billion won (8.2 million U.S. dollars) in extra funds in next year’s budget to implement this plan. Due to the secretive nature of the operation, 6.68 billion (6 million dollars), or 73.5 percent of the amount, is classified as special activities expenses.

In a report on the budgetary plans submitted to parliament, the agency said it will station agents at four global financial hubs including Hong Kong; six locations where Korean companies operate including Shanghai; and five regions with large ethnic Korean populations including Los Angeles.

The agency also said it will use intelligence sources in 20 places deemed to have poor public safety, including Russia and Kazakhstan.

The collective amount of money hidden by Korean companies and individuals in 11 countries, which follow the principle of secretive financial transactions, is estimated in the billions of dollars. Based on this analysis, the tax agency said Korea could earn 1 trillion won (900 million dollars) to 10 trillion won (9 billion dollars) per year in tax revenue if the overseas agents are deployed.

In May, taxable earnings worth 622.4 billion won (562 million dollars) were found in secret Swiss bank accounts. The money had been deposited by four Korean companies apparently to dodge taxes, and the four had to pay 339.2 billion won (310 million dollars) in additional taxes.

In the process of the audit, the agency reportedly used financial account data secretly purchased from a Swiss site.

The U.S. has tax attaches who collect intelligence on tax evasion in 10 world cities. Japan has deployed tax intelligence agents at 18 cities in 13 countries since 1985.

In February 2008, the German government paid 7 billion won (6.32 million dollars) for intelligence on the financial accounts of Germans at LGT Bank, the largest financial group in the tax haven of Lichtenstein, and collected 300 billion won (271 million dollars) in back taxes.