In a bid to ensure fair taxation, the city of Cheongju in South Korea is taking significant steps to tackle tax evaders in the crypto space. The city’s tax authorities have initiated investigations into the digital assets of those evading their tax obligations, with an aim to seize their cryptocurrencies.
Cracking Down on Crypto Tax Evasion
As per the report from local news agency Yonhap on August 22, the city’s authorities are focusing on residents who have been using cryptocurrencies to dodge their tax responsibilities. The investigations target 8,520 users on prominent South Korean crypto exchanges, including Upbit and Bithumb, who owe at least $750 in local taxes.
This action is a part of a wider effort to address the growing concern of wealth concealment through cryptocurrencies in the country. The city’s regulators are taking proactive steps to ensure accountability and establish fair taxation practices in the digital asset realm.
Seizing Crypto Assets to Recover Tax Arrears
Once the investigations are complete, the city plans to seize crypto assets from the tax delinquents. In 2020, South Korean tax authorities had seized $180 million worth of crypto assets due to tax evasion. Out of this, a significant portion was seized for national and local tax arrears. The collected arrears from these seizures amounted to 84.1 billion won.
The National Tax Service (NTS) has been leading this crackdown, with the power to demand the transfer of virtual currency from tax evaders and exchanges, thanks to revisions to tax laws. The NTS’s approach involves “compulsory collection,” resulting in tax payment settlements and, in some cases, the liquidation of seized coins.
Regulating the Digital Asset Space
South Korea has been making strides in regulating the digital asset space. A few months ago, it passed its first independent digital-asset bill aimed at protecting investors following the collapse of tokens associated with Do Kwon. The Virtual Asset User Protection legislation defines digital assets, penalizes market manipulation, and grants regulatory oversight to the Financial Services Commission.
For those involved in the crypto space, it is essential to keep abreast of these developments and ensure compliance with tax obligations. Tools like cryptoview.io can provide valuable insights and facilitate better management of digital assets.
Try cryptoview.io today for a comprehensive view of your crypto assets
