Overseas financial account disclosures top W107tr, up 13.3%

Overseas financial account disclosures surpassed 107 trillion won this year, crossing the 100 trillion won threshold for the first time in three years, driven by a surge in foreign stock holdings. Including overseas trust disclosures reported for the first time this year, total overseas assets reached 111 trillion won.

According to the National Tax Service on Wednesday, the total amount disclosed under the overseas financial account reporting system reached 107.1 trillion won, a 13.3 percent increase from last year. The number of filers rose 9.1 percent to 7,484.

The latest figure marks the first time disclosures have exceeded 100 trillion won since 2023, when they stood at 186.4 trillion won. They fell to 64.9 trillion won in 2024 before recovering to 94.5 trillion won last year.

Stocks accounted for 61.3 trillion won — reported by 2,434 filers — up 13.2 trillion won from the previous year and representing 57.2 percent of the total.

The National Tax Service attributed the increase primarily to the expansion of South Korean companies overseas, which drove up stock listings and valuations abroad. It said the overseas stock figure was the highest on record.

Among individual filers, those in their 50s made up the largest share by number at 29.8 percent, followed by those in their 40s at 26.7 percent and those aged 60 and older at 24.4 percent.

By amount, filers aged 60 and older held the most at 32.6 percent of the total, followed by those in their 50s at 23.3 percent and those in their 40s at 22.0 percent.

Average disclosed amounts per person were highest among those aged 60 and older at 5.48 billion won, followed by those in their 30s at 4.89 billion won and those aged 20 and under at 3.83 billion won.

By country, excluding virtual asset accounts, the United States led both in the number of account holders at 3,372 and in total disclosed amount at 29.7 trillion won.

India emerged as the second-largest country by amount. Account holders numbered just 113, or 1.5 percent of the total, but the disclosed amount jumped 7.2 trillion won from the previous year to around 28.9 trillion won, representing 27 percent of the total.

Virtual asset disclosures fell 600 billion won to 10.5 trillion won, reflecting a decline in prices. The number of virtual asset filers edged up by 42 to 2,362.

Some 2,380 first-time filers, accounting for 31.8 percent of the total, newly disclosed 6.4 trillion won in overseas assets. By asset type, stocks were the largest category at 2.8 trillion won, and by country, the United States accounted for the biggest share at 2.3 trillion won.

Residents and domestic corporations are required to file a report if the combined balance of their overseas financial accounts exceeded 500 million won on even a single day at the end of any month during the previous year.

A total of 1,286 filers disclosed 3.8 trillion won in overseas trusts — the first year such disclosures have been required.

Individual filers made up 97.6 percent of all filers by number, but corporations accounted for 81 percent of the total disclosed amount.

The National Tax Service said this reflects the tendency of asset management firms, shipping companies and other corporations to hold large sums in bonds, funds and similar instruments through trust structures. Among individuals, insurance products accounted for 75.3 percent of all overseas trust filings by number.

The average holding period for overseas trusts was about five years, and 42.2 percent of holdings had been held for five years or more.

Of the 1,591 overseas trust cases reported, 758 — or 48 percent — were held in Hong Kong, the largest share by number. By amount, the United States accounted for 80 percent of total disclosed trust assets, or 3 trillion won.

The National Tax Service said that despite this being the first year of overseas trust reporting, strong participation was achieved through information sessions and advance guidance, adding that the requirement had made it possible to bring previously undetected trust assets into the tax net.

The agency said it plans to rigorously verify suspected non-filers and under-filers using international information exchanges and other tools, imposing fines of 10 percent of the undisclosed amount and collecting any related taxes owed.

However, filers who missed the legal deadline may still reduce their fines by up to 90 percent by voluntarily submitting an amended return.

Since 2011 through the end of last year, the National Tax Service has identified 969 individuals who failed to report overseas financial accounts and imposed cumulative fines totaling 287.8 billion won. Last year alone, 148 people were penalized for a combined 24.5 billion won.

Starting next year, the agency plans to implement automatic cross-border exchange of cryptocurrency transaction data, which it will use to verify virtual asset holdings reported by other countries.

A National Tax Service official urged anyone who has omitted overseas assets from their disclosures to file as soon as possible, noting that this year's proposed tax law amendments include raising the penalty for failing to report overseas trusts from 100 million won to 1 billion won and introducing a reward system for reporting such omissions.