외국환거래 위규신고 가이드

When gifting real estate in Korea to children who are U.S. citizens or permanent residents, many people assume they've completed all the necessary tax filing and registration procedures. However, during my practical consultations, I often encounter cases where they overlook the crucial Foreign Exchange Transactions Act violation reporting requirement, leading to significant complications.

At Seum Administrative Law Firm A must-check guide to reporting foreign exchange transaction violations when purchasing domestic real estate for children living abroad.We will organize it for you.

1. Why Taxes and Registration Aren't Everything: The Traps of "Capital Transactions"

Generally, the real estate acquisition process seems to proceed smoothly, with a licensed real estate agent (contract), a legal representative (registration), and a tax accountant (taxes). However, An act in which a resident parent provides funds to a non-resident child to acquire real estate.It is not a simple transaction, but rather a **capital transaction** under the Foreign Exchange Transactions Act.

From the perspective of the Foreign Exchange Transactions Act: Even if the funds do not cross the border, any change in rights between residents and non-residents must be Report to the Bank of Korea or a designated foreign exchange bankMust do.
Consequences of omission: Even if the register of real estate is clean and the gift tax has been paid in full, transactions without approval from foreign exchange authorities may be considered "illegal fund transfers.".

2. Frequent violations and their repercussions

The most common irregular structures are:.

Funding Source: Parents (residents) deposit the down payment and balance for the apartment directly from a domestic account.
Name form: Ownership is set in the name of the child (non-resident) in the United States.
Tax treatment: Gift tax and acquisition tax must be faithfully reported and paid.
Critical mistake: Omission of ‘Report on Acquisition of Domestic Real Estate by Non-Residents’ according to the Foreign Exchange Transactions Act.

These violations are not immediately apparent. Usually When your child later sells the property and wants to send the proceeds overseas The absence of a certificate of declaration can cause difficulties during the bank's screening process.

3. What if it's already too late? The answer is "post-mortem reporting."

If registration has already been completed, "pre-registration" is not possible. In this case, even if you risk administrative action, you must remedy the procedural defect through a "post-regulatory violation report (voluntary report)".

The three-step process for reporting violations

Step 1: Officially voluntarily report any violation of the Foreign Exchange Transactions Act through your bank.
Step 2: Submission of post-event reports on donations and real estate acquisitions to the Bank of Korea.
Step 3: Reduction of fines and completion of administrative procedures based on the information provided.

Tip: If you make a voluntary report, you must do so in accordance with relevant laws and regulations. Reduce the penalty to a maximum of 50%You can receive it, and above all, you can secure a legitimate overseas channel for the future sale proceeds.

4. Why do you need the assistance of an administrative expert?

Foreign exchange transaction regulations are a specialized area that is difficult for general real estate practitioners or bank tellers to fully understand. The purpose is not simply to submit documents., Logical structure of the violation reportThis is the key.

division	General response	Seum's professional consulting
Writing a report	A simple list of facts	Explanation of non-intentionality and considerations
Responding to fines	Pay the exact amount charged	Legally Based Appeal and Mitigation Strategy
Funding	Submit a fragmentary transfer history	Ensuring legitimacy of the entire flow of funds

Depending on how the negligence is proven, the amount of the fine can vary from several million won to tens of millions of won.

Conclusion: Safeguarding Your Children's Future Assets

Violations of the Foreign Exchange Transactions Act become increasingly complex to resolve over time. What may seem like a minor omission in documentation now can later become a critical limitation when your children manage or recover assets.

Parents of children who are U.S. citizens or permanent residents are encouraged to review past transactions now. If you encounter any procedural difficulties, Seum Administrative Attorney FirmWe will be your strong partner.