South Korean tax officials in the city of Pohang have intensified their efforts to seize cryptoassets from residents who have failed to pay local taxes. This decision is part of a national crackdown on tax evaders in the country. The move comes after tax officials managed to seize almost $29 million in coins and fiat in 2023, highlighting the magnitude of the issue.
Data from Domestic Crypto Exchanges
The tax officials have utilized data from the four biggest domestic crypto exchanges – Bithumb, Upbit, Korbit, and Coinone to identify residents who own cryptoassets but have evaded local tax bills. With all wallets legally bound to “real-name,” social security number-verified bank accounts, tax officials were able to pinpoint 5,208 residents who were behind on their taxes. This shows the level of sophistication in tracking down tax evaders who are using digital assets to avoid paying their dues.
The city of Pohang has decided to take a firm stance against tax evaders by actively collecting delinquent taxes and seizing the virtual assets of individuals who have not paid their dues. Once it is established that the coins belong to tax evaders, the city will immediately seize and freeze transaction activities such as sales or withdrawals. This demonstrates the seriousness with which the authorities are addressing tax evasion in the digital age.
Tax delinquents will be given an ultimatum to voluntarily pay their tax bills after the seizure of their virtual assets. Those who continue to evade taxes will face the consequence of having their virtual assets sold on the exchange market. This tough approach is intended to deter taxpayers from trying to circumvent their tax obligations.
Government’s Response
Won Ki-ho, the head of the tax department at the Nam Gu Office, emphasized the government’s commitment to raising awareness among delinquent taxpayers. The introduction of customized collection techniques suitable for the digital age indicates that the government is adapting to the evolving landscape of digital assets and tax evasion.
The recent crackdown on tax evaders in South Korea, particularly those using cryptoassets, underscores the government’s determination to combat tax evasion and ensure compliance with tax regulations. The seizure and freezing of assets, along with the threat of selling virtual assets on the exchange market, serve as a warning to individuals who attempt to evade their tax responsibilities using digital assets.