#Businessman A received income earned abroad in 2024 through his child's overseas account while studying abroad but did not report foreign income or the overseas financial account. The child also failed to report an account holding more than 5 billion won. The National Tax Service confirmed the balance of the child's account and traced the source of funds through international exchange of foreign exchange transaction data. Ultimately, tax authorities determined that businessman A had used his child's account in a nominee capacity and imposed late fees on both the businessman and the child for failure to report the overseas financial account.
This year, declarations of overseas financial accounts surpassed 100 trillion won. The increase was driven not only by a rise in retail investors in overseas stocks but also by rising values of overseas stocks and improved corporate performance related to overseas investments.
According to the National Tax Service, the total number of declarants this year reached 7,484, with declared amounts totaling 107.1 trillion won. Compared to last year's 6,858 declarants and 94.5 trillion won in declared amounts, the number of declarants increased by 626 (up 9.1% year-on-year), and declared amounts rose by 12.6 trillion won (up 13.3% year-on-year). This marks a double-digit growth rate for two consecutive years since 2024.
Declarants must report to the National Tax Service if the balance of their resident or domestic corporate overseas financial account exceeds 5 billion won on any single day at the end of any month in the relevant year.
When the account holder and the beneficial owner are different, both parties have a reporting obligation. The same applies to jointly held accounts, where all joint holders are required to report.
Notably, since 2023, overseas virtual asset accounts have been included in the reporting scope. This covers not only accounts opened with overseas virtual asset service providers for trading virtual assets but also wallets opened with overseas wallet providers for storing virtual assets.
Reviewing this year's declaration results, individual declarants numbered 6,663 and reported 27.4 trillion won, an increase of 640 declarants and 70 billion won compared to last year.
For corporate declarants, 821 companies reported 79.7 trillion won, an increase of 11.9 trillion won over last year's declared amount.
By asset type, based on the number of declarants, time deposits and savings accounts were the most common with 3,487 declarants, followed by stocks with 2,434 declarants and virtual assets with 2,362 declarants.
Regarding stocks, overseas stock account holders numbered 2,434 this year, reporting a total of 61.3 trillion won, an increase of 13.2 trillion won year-on-year. While the number of individual stock account declarations and corporate stock account declared amounts increased, virtual asset account declarations decreased by 60 billion won.
The problem is that some individuals and companies, like Mr. A, fail to report assets in overseas financial accounts even when they exceed the reporting threshold.
From 2011 through 2025, over the past 15 years, the National Tax Service has identified 969 individuals who failed to report overseas financial accounts and imposed late fees totaling 287.8 billion won.
In 2011, only 20 individuals were found for failing to report overseas financial accounts, resulting in late fees of 1.1 billion won. However, thanks to thorough verification using international information exchange data, foreign exchange transaction records, and various other information sources, last year saw 148 individuals identified with late fees of 24.5 billion won imposed.
The National Tax Service is strictly enforcing penalties—including late fees, criminal prosecution, and public disclosure of names—by identifying violators of overseas financial account reporting obligations through declaration verification and tax audits.
Consequently, if an account subject to reporting is underreported or not reported within the deadline, a late fee of 10% will be imposed on the underreported or unreported amount. If the source of the underreported or unreported amount cannot be substantiated or is falsely substantiated, an additional late fee equivalent to 10% of that amount will be imposed.
In particular, if the amount violating the account reporting obligation exceeds 5 billion won, the violator may face administrative penalties (summary disposition), criminal prosecution via notification or law enforcement authorities' indictment, and public disclosure of personal information through name publication.
The National Tax Service issued summary dispositions (notification and indictment) against 110 individuals for violations of overseas financial account reporting obligations by the end of December 2025 and publicly disclosed the personal information of 13 individuals.
However, even after this year's declaration deadline (June 30, 2026), underreported or unreported overseas financial accounts can be corrected through amended declarations or late filings. In such cases where underreported or unreported accounts are voluntarily corrected or filed late, the late fee may be reduced by up to 90% of the underreported or unreported amount depending on the timing of the correction, and the violator will be excluded from public disclosure lists.
However, if a declaration is made after learning in advance that the tax authorities intend to impose late fees, no reduction in the late fee will apply, making voluntary correction or late filing more advantageous.
Additionally, individuals who provide important information leading to the detection of violations of overseas financial account reporting obligations may receive rewards of up to 2 billion won.
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