South Korea Changes Reporting Guidelines for Foreign Exchange Transactions

SUNNYVALE, Calif. - Oct. 29, 2013 - PRLog -- South Korea recently amended the reporting guidelines for foreign exchange transactions, reports Nair & Co. International Tax Compliance Services Team. The Ministry of Strategy and Finance (MOSF) of South Korea has set forth the following provisions in a way to strengthen the administration related to foreign exchange transactions and prevent tax avoidance.

Following are major highlights of the updated regulations:

*     Foreign exchange transactions may be reported to commercial banks, rather than the Bank of Korea, when transactions involve only the net amounts.

*    Foreign exchange transactions that must be reported include:

*    Capital increases.

*    Sales of overseas subsidiaries (including their establishments).

*    Investments of holding companies in subsidiaries.

*     Foreign Exchange transactions exempt from reporting duties include:

*    Net settlements of less than USD 1,000.

*    Payments to third parties.

*    Settlement practices used in the global market.

*    Certain small transactions.

In addition, details of foreign exchange transactions will be shared among government agencies to help prevent overseas tax evasion and illegal transactions.

Companies carrying out international transactions may consider updating their internal systems for complying under the new foreign exchange transaction reporting mechanism.

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