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Tax officials to get access to Swiss bank accounts
By Korea HeraldPublished : March 1, 2012 - 21:18
The Korean government will be able to gain access to hidden Swiss bank accounts held by its citizens, which could help trace illegal slush funds and prevent tax evasion, officials said on Thursday.
The National Assembly early this week ratified a provision on information sharing in the Korea- Switzerland tax treaty, taking the National Tax Service a step closer to accessing secret bank accounts in the world’s biggest haven for offshore wealth. The Swiss parliament is expected to follow suit in July.
“As the new provision allowing information sharing between the tax authorities of Korea and Switzerland was ratified, the NTS will be able to break into secret accounts owned by Koreans on request,” a Finance Ministry official said.
Enabling access to hidden bank accounts in Switzerland allows NTS to investigate offshore attempts of tax evasion and illegal outflow of capital parked at arguably the world’s best protected offshore banking center.
According to the Yonhap news agency, the authority to screen accounts held in Swiss banks is the result of a pact signed by Seoul and Bern in 2010 that permits the sharing of financial and tax-related information.
Once the formal ratification process is complete and related revisions are made to tax codes, Seoul will have the authority to check accounts it could not monitor in the past. The tax office said the move will revolutionize its ability to cope with tax evaders.
“But the sharing of financial information doesn’t mean the NTS can fully access all information of accounts held by Koreans there. It is an upon-request deal, and the NTS will need to know at least the name of the account holder,” the official said.
In the past, Swiss banks have resisted outside scrutiny by stressing their need to protect the privacy of depositors, with the country gaining notoriety as a tax haven for the rich seeking to avoid legal obligations.
In addition, the NTS said the bilateral pact will fuel business activities by lowering the overall tax burden on companies and individuals in such areas as dividend earnings, returns on investments and real estate holdings.
Korea, in dire need of tax revenue to ready for ever-increasing welfare spending, has joined the U.S., U.K. and Germany in pushing Switzerland to end the era of banking secrecy. The country’s tax revenue grew 8.3 percent to 192.4 trillion won ($171.8 billion) in 2011. It is slightly lower than the estimated amount of 192.8 trillion won.
By Cynthia J. Kim and news reports
(cynthiak@heraldcorp.com)
The National Assembly early this week ratified a provision on information sharing in the Korea- Switzerland tax treaty, taking the National Tax Service a step closer to accessing secret bank accounts in the world’s biggest haven for offshore wealth. The Swiss parliament is expected to follow suit in July.
“As the new provision allowing information sharing between the tax authorities of Korea and Switzerland was ratified, the NTS will be able to break into secret accounts owned by Koreans on request,” a Finance Ministry official said.
Enabling access to hidden bank accounts in Switzerland allows NTS to investigate offshore attempts of tax evasion and illegal outflow of capital parked at arguably the world’s best protected offshore banking center.
According to the Yonhap news agency, the authority to screen accounts held in Swiss banks is the result of a pact signed by Seoul and Bern in 2010 that permits the sharing of financial and tax-related information.
Once the formal ratification process is complete and related revisions are made to tax codes, Seoul will have the authority to check accounts it could not monitor in the past. The tax office said the move will revolutionize its ability to cope with tax evaders.
“But the sharing of financial information doesn’t mean the NTS can fully access all information of accounts held by Koreans there. It is an upon-request deal, and the NTS will need to know at least the name of the account holder,” the official said.
In the past, Swiss banks have resisted outside scrutiny by stressing their need to protect the privacy of depositors, with the country gaining notoriety as a tax haven for the rich seeking to avoid legal obligations.
In addition, the NTS said the bilateral pact will fuel business activities by lowering the overall tax burden on companies and individuals in such areas as dividend earnings, returns on investments and real estate holdings.
Korea, in dire need of tax revenue to ready for ever-increasing welfare spending, has joined the U.S., U.K. and Germany in pushing Switzerland to end the era of banking secrecy. The country’s tax revenue grew 8.3 percent to 192.4 trillion won ($171.8 billion) in 2011. It is slightly lower than the estimated amount of 192.8 trillion won.
By Cynthia J. Kim and news reports
(cynthiak@heraldcorp.com)
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Articles by Korea Herald
