Hong Kong no longer safe haven for South Korean tax evaders

Both nations sign pact on tax evaders

South Korea’s Ministry of Strategy and Finance said Korea and Hong Kong have signed an agreement to exchange information about tax evaders. The pact will go into effect next year after approvals by both parliaments.

Hong Kong laws give limited access to personal information of investors, making it difficult to exchange details on tax evaders. South Korea, however, has been pushing to change this since Hong Kong revamped some regulations in 2010.

The new agreement allows South Korea to block individuals from evading taxes via Hong Kong. A Korean government official said the South Korean government will now be able to access information from financial institutions based in Hong Kong and can request past financial records, as well.

Korea’s National Tax Service reported that Koreans voluntarily reported a total of US$144 million in Hang Kong bank accounts this year, up 64% from 2012.