"Stocks·coin just barely exceeded '₩500 million'... Shocked while checking messages"

June National Tax Service Reporting Period

Stocks, funds, insurance, and coins held with overseas financial companies are subject

All assets in all accounts must be reported

It's the month for overseas financial account declarations again. Residents with an address in Korea or domestic corporations with local branches must declare all financial assets held in overseas financial accounts. If the total balance across all accounts exceeds ₩500 million at any point, you must report everything, from cash and securities to coins.

The key: '₩500 million' as of every month-end

According to the National Tax Service on the 31st, as of December 31, 2024, residents and domestic corporations must report cash, stocks, bonds, collective investment securities, insurance products, derivatives, and virtual assets in all overseas financial accounts opened with overseas financial institutions by June 30. Here, 'overseas financial institutions' refers to financial institutions or virtual asset service providers located outside Korea. Overseas branches of Korean banks, securities firms, or virtual asset exchanges are included, but domestic branches established by foreign financial companies are not.

A resident refers to an individual who has an address in Korea or has resided more than 183 days in the country. A domestic corporation is a company whose headquarters, main office, or actual place of business management is located in Korea. Note that overseas branches of a domestic corporation are also considered part of the domestic corporation, so overseas branch accounts also must be reported. If the balance in overseas financial accounts held by such residents or domestic corporations exceeded ₩500 million on any one day as of each month-end in 2024, reporting is required.

For example, suppose a resident or domestic corporation holds A Account (deposit), B Account (virtual asset), C Account (insurance), and D Account (bonds). If each account originally had only ₩100 million—totaling ₩400 million from January to April—but on May 31 last year, the virtual asset balance increased by ₩100 million, making A Account ₩100 million, B Account ₩200 million, C Account ₩100 million, and D Account ₩100 million, so the total is ₩500 million, each account must be reported. Even if the individual closed either C or D account in September, since the total exceeded ₩500 million on at least one month-end, all of A~D accounts must be reported this month.

Last year's reported amount: ₩64.9 trillion

Major advanced countries such as the United States, France, and Japan already operate reporting systems for overseas financial accounts, aiming to recover outbound capital and recapture hidden offshore tax bases. Korea also introduced the overseas financial accounts reporting system in 2011 to prevent illegal offshore capital outflow and offshore income tax evasion. In 2019, the reporting threshold was lowered from ₩1 billion to ₩500 million, and from 2023, virtual asset accounts were included.

Last year, total reported overseas financial account holdings amounted to ₩64.9 trillion. Of this, stocks accounted for ₩23.6 trillion—the largest share—followed by deposits and savings (₩20.6 trillion) and virtual assets (₩10.4 trillion). According to the National Tax Service, this year, notifications have been sent via mobile and mail to 15,000 taxpayers likely to have overseas financial accounts exceeding ₩500 million.

Foreigners, overseas Koreans are excluded

Some individuals are exempt from this reporting obligation. Even residents and domestic corporations who hold overseas financial accounts are exempt if they qualify as foreign residents or overseas Koreans. A foreign resident refers to someone who, in the relevant reporting year (2024 for this declaration), resided in Korea for five years or less between January 1, 2015, and December 31, 2024. An overseas Korean is someone who resided in Korea for 183 days or less in the year before the end of the reporting year (January 1 to December 31, 2024). What about U.S. permanent residents? Even if you are a U.S. permanent resident, you must report if you also qualify as a resident in Korea. However, if you are a U.S. permanent resident and also meet the criteria for 'overseas Korean' above, the reporting obligation is waived.

Additionally, employees of international organizations are also exempt from reporting. If someone works at a foreign government, the United Nations, or an organization established by an international agreement between Korea and another country, is not a national of the Republic of Korea, and is tax-exempt under the Income Tax Act, then reporting of overseas financial accounts is not required.

Reporter Nam Jeong-min