South Korea’s tax authorities said they have evidence that 2,416 South Korean people have hidden their income by buying cryptoassets including bitcoin (BTC), ethereum (ETH) and more in efforts to avoid having to pay tax on their earnings – and have moved to seize and liquidate their crypto.
Per reports from Yonhap and Asia Kyungjae, as well as Maeil Kyungjae, the National Tax Service (NTS) has been combing through data it has obtained from domestic crypto exchanges, and claims it has gathered enough evidence to serve up bumper tax bills for offenders.
In some cases, the NTS said that it has frozen and seized wallets belonging to suspected offenders, “collecting cash” – meaning that the tax authority has either liquidated (or forced the owners to liquidate) the crypto holdings on the exchange platforms where they were found.
The NTS claimed it had found undeclared crypto worth over USD 32m on the nation’s top exchanges, including an unnamed doctor in the country’s most affluent regions, Seoul’s Gangnam District, who it claimed had hidden USD 3.5m worth of earnings in crypto.
And the NTS said that in the case of 222 of the individuals, it already had enough evidence to conduct “further probes” into their financial activity. Others are likely to face tax bills for their undeclared earnings, in addition to fines.
A spokesperson for the tax service stated that its findings were part of a wider “crackdown” on tax evasion, adding that it was now on the lookout for “highly sophisticated” methods in suspected tax irregularity cases.
The NTS also gave the example of a suspect it said sold a property in an exclusive part of the wealthy Gyeonggi Province for just under USD 4.3m, but sought to conceal the full price from the NTS by claiming it was sold for significantly less – and allegedly dodging a USD 1m capital gains tax bill.