The South Korean “crypto tax crackdown” is being enforced in Yeongcheon, a city in North Gyeongsang Province. Although crypto trading profits are currently not subject to taxation in South Korea, local authorities have taken action against tax delinquents by seizing and liquidating coins. Yeongcheon city authorities announced intensive collection activities on April 15, utilizing powerful new software tools to comb domestic crypto exchange data to match unpaid bills with corresponding crypto wallets and bank accounts. The central government has granted them the power to freeze wallets, seize tokens, and liquidate coins of tax dodgers, with the campaign set to continue until June 28.
In addition to targeting tax delinquents’ crypto assets, the city of Yeongcheon is launching a campaign to patrol residential areas, high-density traffic areas, apartment complexes, and parking lots for license plate retention. Vehicles belonging to tax delinquents will be towed and impounded, with plans to immediately sell the vehicles at public auction if outstanding tax bills are not settled. Some citizens have claimed inability to pay their tax bills, prompting the city to check their crypto wallets and investments in secondary financial institutions to verify their claims.
The recent rise in Bitcoin prices is cited as the main reason for the city’s crackdown on tax delinquents, as the reinvigorated markets make it more likely for tax evaders to invest in cryptoassets. Oh Young-ho, the head of Yeongcheon’s Taxation Department, expressed gratitude towards citizens who faithfully pay their taxes despite economic downturns, and emphasized the importance of boosting local tax revenues by taking strong measures against repeat offenders. Earlier this month, tax officials in Pohang, in the same province, seized crypto from 5,208 local tax dodgers as part of the nationwide crackdown that saw nearly $29 million worth of coins and fiat confiscated from crypto wallets in 2023.
The nationwide crypto tax crackdown in South Korea is part of an effort to ensure compliance with tax regulations and increase local tax revenues. By utilizing new software tools to track and match unpaid tax bills with crypto wallets and bank accounts, local authorities are able to identify tax dodgers and take action to seize and liquidate their assets. The enforcement efforts extend beyond crypto assets to include license plate retention patrols in various locations to identify and impound vehicles of tax delinquents. The rise in Bitcoin prices has made it more tempting for tax evaders to invest in cryptoassets, prompting cities like Yeongcheon to take proactive measures against such individuals.
The crackdown on tax evaders in South Korea is aimed at cracking down on those who fail to pay their local taxes, even though profits from crypto trading are not currently taxed in the country. The campaign in Yeongcheon includes the use of technology to track down tax dodgers’ crypto assets and verify their claims of inability to pay taxes. By combining traditional methods of identifying tax delinquents with new software tools and patrols to locate their assets, the authorities are sending a strong message that tax compliance is essential for contributing to local tax revenues. Additionally, the recent success in seizing crypto assets in Pohang and other cities demonstrates the government’s commitment to enforcing tax regulations and cracking down on those who attempt to evade their tax obligations.
