By Kim Han-ul From Arirang News

Seven more names have been added to last week’s list of 2-hundred-45 Koreans who own paper companies abroad.

The companies, which exist in name only and have no history of transactions, are suspected of being used as secret shelters for slush funds or are used for tax evasion purposes.

The companies were established in countries known for being tax havens — territories where certain taxes are exempted or levied at a low rate.

The British Virgin Islands, Bermuda and the Cayman Islands are just a few of the officially recognized tax havens around the world.

Moving a company to a tax haven is not illegal, but it becomes illegal when it is used to help the main company avoid taxe.

Experts say that just the act of establishing a paper company in an overseas tax haven is suspicious because tax havens do not disclose the names of the individuals and companies who are gaining the benefits of the low tax rates.

That lack of transparency makes it difficult to identify and fine tax evaders with secret assets overseas.

Korea’s National Tax Service says it isn’t easy to spot cases of tax evasion by paper companies because of the fine line between what is legal and what’s not, adding that international co-operation is essential.

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http://www.arirang.co.kr/News/News_View.asp?nseq=147606