Korea and Hong Kong have signed a deal to exchange information about tax dodgers, the Ministry of Strategy and Finance said Sunday.
Although Hong Kong is Asia's financial center and the fourth most popular investment destination of Koreans, its laws give limited access to personal information of investors, making it difficult to exchange details on tax evaders. But Seoul has been pushing for help since Hong Kong revamped some regulations in 2010.
A ministry official claimed the agreement allows Korea "to block individuals from evading taxes via Hong Kong." "We are now able to access information from financial institutions based in Hong Kong and can request past financial records as well."
According to the National Tax Service, Koreans have voluntarily reported a total of W154.6 billion (US$1=W1,087) in Hang Kong bank accounts this year, up 64 percent from 2012.
The pact will go into effect next year after both parliaments give it the green light.