 Korean Investment in Tax Havens Since 2000Moon Jongchol ()
No 20-9, Industrial Economic Review from Korea Institute for Industrial Economics and Trade Abstract: The attempt by corporations and individuals to evade tax imposition by moving wealth and capital to tax havens has long been a problem for governments and national economies. Tax haven investment for the purpose of tax evasion has been criticized in that it causes distortions in the distribution of wealth, increasing disparities between the rich and the poor. In addition, the capital stock sheltering in tax havens does not contribute to productivity of the economy. Therefore, governments and international organizations have made efforts to monitor and restrict the flow of capital into tax havens. The OECD began conducting research on tax havens as early as the mid-1980s, and the EU is currently strengthening regulation on capital flows into tax havens. Outside officialdom, non-government organizations part of the tax justice movement are doing their own research and urging governments to take bolder action. However, these attempts thus far have not been successful and the volume of capital stock in tax havens has consistently grown and Korea is no exception to this trend. As capital flows into tax havens have increased, it has become necessary to grasp the reality of capital flight to tax havens in a comprehensive manner. Y There is no extant research on the Korean case, although the government has occasionally performed spot investigations. This articles describes the macroeconomic characteristics of capital flight into tax havens in the form of overseas investment by Korean firms and individuals using data on outward direct investment. This work illuminates the potential problem of tax evasion risk in Korea that assumes the form of overseas investment. Keywords: tax haven; tax shelter; capital flight; Korea; tax evasion; tax avoidance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ris:kieter:2020_009 Access Statistics for this paper More papers in Industrial Economic Review from Korea Institute for Industrial Economics and Trade Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea. Contact information at EDIRC. |
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