TAX EVASION BY FOREIGNERS

[Anchor Lead]

Some people are found to have evaded tax payments, saying they don't have Korean citizenship. But they call themselves Korean when they need health insurance coverage. The National Tax Service discovered a considerable number of these self-interested people.

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Those with foreign citizenship have to pay taxes if they stay in Korea for over 183 days.
A man with American citizenship flew back and forth between Korea and the U.S. He was exempt from paying income tax in Korea, as he had claimed he had lived in the U.S. for more than six months. He took advantage of the loophole that it takes time for the National Tax Service to receive immigration records. However, his lie was caught eventually, as he received a free COVID-19 test upon entering Korea and was covered by the state health insurance program while staying here. He now must undergo a tax investigation for tens of billions of won, which he had not declared as his income.
A real estate businessman with American citizenship did not file his income tax return, saying he is a foreigner. But his tax evasion was disclosed due to records of his credit card payments with domestic hospitals. Both of them actually reside in Korea with their families. They evaded tax payments through the so-called nationality laundering. But they enjoyed the benefits to which they are not entitled to.

[Soundbite] Roh Jeong-seok(Nat’l Tax Service) : "We have other criteria to acknowledge the non-resident status, such as whether or not their families live in Korea and they have domestic properties. So it is difficult for them to obtain the non-resident status if they just manipulate the number of days they spend in Korea."

There is even a Korean who exploited the legal clause that he didn't have to pay tax for the income he earned overseas if he was recognized as a non-resident Korean. A real estate businessman lived in Korea with his family but declared himself as a non-resident, claiming that he traveled overseas frequently. The National Tax Service believes he intended not to pay tax for the rental income he earned overseas.

[Soundbite] Kim Jin(Tax accountant) : "Non-residents are required to pay taxes on income they earn in Korea. So he only declared the domestically generated income, calling himself a non-resident."

The tax watchdog will strengthen crackdowns on such tax evasion schemes, as an increasing number of expatriates are coming back to Korea amid the pandemic.