Tax Agency Vows to Go Hard After Koreans Using Crypto to Evade Levies

Tax Agency Vows to Go Hard After Koreans Using Crypto to Evade Levies

South Korea’s tax administration has pledged to take strict measures against tax evasion through virtual assets and platforms. While the Korean government is yet to start taxing capital gains resulting from crypto investment and trading, authorities in Seoul claim cryptocurrencies have been actively used for money laundering. Korean Citizens Accused of Investing in Crypto Assets to Dodge Taxes

The National Tax Service (NTS) of South Korea intends to take severe actions against tax evasion practices relying on virtual assets, such as cryptocurrencies, and platforms operating with them, the Korea Herald informed its readers, quoting a representative of the agency.

A growing number of Korean people are reportedly seeking to evade taxes by investing in crypto assets after moving their wealth to tax havens like some countries in the Caribbean Basin and Southeast Asia, the official said on Monday.

During the authority’s policy briefing before the strategy and finance committee at the National Assembly, the Korean parliament, the official elaborated that this kind of new tax evasion is hampering justice in the market as well as fairness in taxation.

Although the NTS is yet to implement taxation for gains from the trading of cryptocurrencies, these assets have been actively used for money laundering, he emphasized. The official citied different cases involving such behavior on the part of tax payers. In one of them, the owner of a hospital in Seoul owed 2.7 billion won ($2 million) in income tax.

The man, who was residing in the Korean capital’s Gangnam district, insisted he was not earning anything. However, the tax service was able to establish that he had put 3.9 billion won (almost $3 million) into cryptocurrency. He was forced to fulfill his obligations to the state after the NTS seized his crypto account. Crypto has been allegedly used to evade inheritance and gift taxes as well.

NTS officials also admitted that the operators of online platforms are a prime target for the agency. The claim is that an increasing number of them are seeking to relocate their servers for electronic commerce abroad, to avoid taxation, including to tax havens.

South Korean authorities recently again postponed a 20% tax on crypto-related gains until 2025. The levy was supposed to come into force in January, next year, for capital gains exceeding 2.5 million won ($1,900). The government delays imposing the tax for a second time as the original plan was to introduce it in January 2022. Tags in this story Crypto, Cryptocurrencies, Cryptocurrency, korea, korean, NTS, South Korea, south korean, Tax, Tax agency, tax evaders, tax evasion, tax payers, tax service, Taxation, Taxes

What do you think about the intentions of the South Korean tax service regarding crypto investments? Tell us in the comments section below. Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration. Tax Collector Wants $55 Million From Collapsed Bitcoin Ponzi Scheme MTI — Liquidators Accused of Failing Their Duty TAXES | Jul 24, 2022 Tax Agency Starts Checking Crypto Traders in Romania TAXES | Jul 3, 2022

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleBrazil Might Approve Its Cryptocurrency Law This Week Next articleBitcoin, Ethereum Technical Analysis: BTC, ETH Rebound as Global Markets React to Pelosi’s Visit to Taiwan Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItOman to Incorporate Real Estate Tokenization in Virtual Assets Regulatory Framework

Real estate tokenization is set to be incorporated into Oman Capital Markets Authority (OCMA)"s virtual asset regulatory framework. According to an advisor with the authority, the tokenizing of real estate will open investment opportunities for local and foreign investors. Real ... read more.Today"s Top Ethereum and Bitcoin Mining Devices Continue to Rake in Profits Goldman Predicts US Recession Odds at 35% in 2 Years, John Mauldin Wouldn"t Be Surprised if Stocks Fell 40% Fed"s Bullard Wants to Raise Bank Rate to 3.5% by Year"s End, Hints at 75 Basis Point Rate Hike Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing