SEOUL: South Korea and Singapore have signed an agreement on the automatic exchange of financial information of persons with tax liabilities to improve international tax compliance, according to the Ministry of Strategy and Finance on Friday.
Starting from 2018, the financial authorities of the two countries will annually collect and exchange financial information of residents with tax payment duties to the other’s country. For instance, one who does not reside in Korea but has financial activity here, with taxation duty in Singapore, will be subject to the exchange. The exchanged information will contain names, addresses, bank accounts and balances.
Exchanges of more detailed information, such as gross proceeds of sales will commence in 2019. The two countries have exchanged tax information upon request pursuant to a bilateral tax treaty signed in 1981. This is South Korea’s second bilateral agreement on the automatic exchange of financial data, following a similar deal with the US in 2015.
In addition to the bilateral deals with Singapore and the US, South Korea is part of a multilateral tax convention led by the Organisation of Economic Cooperation and Development, an international framework that allows automatic information exchange. The first exchange of financial information will take place in 2017 with 38 countries including the Netherlands, Belgium and Ireland. It will be extended to include 31 more nations, including Switzerland, Japan and Canada, in 2018.
