The tax officials in Hwaseong, South Korea, have taken cryptocurrency assets worth more than $768,500, dealing another blow to the “tax dodgers” in the country.
According to tax officials, they were able to confiscate $567,000—a staggering amount—from only one person. The action is a continuation of a statewide crackdown.
Successive administrations in South Korea have reversed their stances and postponed plans to impose taxes on cryptocurrency trading earnings.
But the government suspects that many citizens have adopted cryptocurrency as a means of hiding their wealth.
In order to find proof of unreported income, tax officials may now search for data from local cryptocurrency exchanges.
The city started looking into the person in question after discovering they hadn’t paid their fair share of municipal taxes and income tax levies, according to Newsis.
However, Hwaseong tax authorities could keep tabs on the person’s cryptocurrency activities with the use of a brand new “electronic management system that can track virtual assets].
In October of last year, the city started using the new platform. After the media source identified the suspect solely as “A,” officials turned to this method in their investigation.
Upon first inspection, city authorities determined that A did not seem to be a property owner, did not own any liquid assets, and did not reside at a registered Hwaseong address.
Together with the National Tax Service, the authorities began a broader investigation. They interrogated members of A’s family as well.
Officials started to think that A could have been using cryptocurrency to cover expenses eventually. The authorities discovered A’s cryptocurrency assets using data from crypto exchanges and used them to settle A’s tax debts.
The 568 residents who had gone into serious tax arrears were also the subject of an investigation by the city.
The relevant tax authority looked into each instance to see if any cryptocurrency wallets with these names were located.
At last, the police found out that one hundred of the suspects “had virtual assets.” Their seizure of cryptocurrency from these “tax dodgers” amounted to $201,500.
It seems that some of these people paid the city “voluntary” cash to prevent the forced sale of their cryptocurrency holdings.
The chief of the city’s tax collecting department, Oh Chu-seop, stated: “Those who routinely avoid paying their fair share of taxes should expect firm punishment from us. That involves taking possession of their own property.”
Using a similar method, the Gyeonggi province was able to recoup $4.6 million in overdue taxes from cryptocurrency holders in February.
South Korean tax evaders should brace themselves, for the authorities are on the hunt. In 2023, tax authorities reported seizing tokens valued at $28.4 million from individuals they deemed as “delinquents.”
South Korea’s governing party has suggested postponing cryptocurrency capital gains tax for the time being.
With this postponement, tax plans would be farther down the road, and South Koreans would not have to pay taxes on their coin profits until at least 2027.
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