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Tax Evasion: South Korean Taxpayers Lose $768,500 in Crypto
This article focuses on South Korean tax evaders whose cryptocurrencies worth over $768,500 were confiscated by tax authorities. Learn more about authorities' efforts to uncover income concealed by cryptocurrencies and combat tax evasion.
Tax Evasion: South Korean Taxpayers Lose $768,500 in Crypto
South Korean tax evaders lose over $768,500 in cryptocurrencies
South Korean taxpayers who tried to avoid taxes have suffered another setback. Hwaseong city tax authorities seized over $768,500 worth of cryptocurrencies.
Tax officials announced they seized a total of $567,000 from a single individual. This measure is part of a continuing nationwide crackdown on tax evasion.
Cryptocurrency profits are not yet taxable in South Korea, where successive governments have postponed and reversed plans to impose taxes.
However, tax officials believe that many people across the country have used cryptocurrencies to hide their earnings and income.
Tax officials have been given the authority to analyze data from domestic crypto exchanges to find evidence of undeclared income.
According to Newsis, the city began investigating the above-mentioned individual after discovering that he had not paid local and municipal taxes.
Using a new “electronic management system for tracking virtual assets,” Hwaseong tax officials were able to monitor the individual’s crypto transactions.
The city began using the new platform in October last year. Officials used this solution to further investigate the person with the media abbreviation “A”.
City officials initially determined that A did not appear to own property, had no cash, and did not live at a registered address in Hwaseong.
Officers launched a major investigation in collaboration with the National Tax Service. They even interviewed family members of A.
Finally, officials suspected that A may have used cryptocurrencies to pay living expenses.
Using data from crypto exchanges, officials were able to uncover A's crypto holdings and seize them to pay off the individual's tax debts.
The city also began investigating 568 citizens who had failed to pay large amounts of local taxes.
In each case, the tax authority checked whether cryptocurrency wallets could be found in the names of these people.
Eventually, officials discovered that 100 of these people owned “virtual assets.” They confiscated a total of $201,500 worth of cryptocurrencies from these “tax evaders.”
An undisclosed number of these people may have made “voluntary” cash payments to prevent the city from forcibly liquidating their cryptocurrencies.
Oh Chu-seop, head of the city's tax collection department, said: "We will take all possible action against repeat tax evaders, including confiscating their assets."
In February, Gyeonggi Province announced that it had used a similar system to recover $4.6 million in outstanding taxes from residents holding cryptocurrencies.
South Korean tax evaders have been warned that local authorities are closing in on them. Tax officials announced that they seized $28.4 million worth of tokens from “defaulters” in 2023.
According to the ruling party's proposals, South Korea could once again postpone the introduction of a capital gains tax on cryptocurrency earnings.
Such a proposed delay would likely reset tax plans and exempt South Koreans from paying taxes on their coin earnings until at least 2027.
South Korea will vote in legislative elections on April 10.
Earlier this month, the National Tax Service announced that it had hired an IT company to help build a cryptocurrency monitoring system.
The system will help the tax authority ensure that cryptocurrency holders pay their taxes regularly. The authority said the platform would also help it confiscate coins from people who do not pay income and municipal taxes.