South Korean authorities seem to be focusing on strengthening measures to combat tax evasion across the nation. The country’s tax watchdog profiled thousands of evaders that relied on cryptocurrencies to hide assets worth billions of Korean won.
Evaders Hid a Total of $32.24 Million in Assets
Per the Korea Herald, the National Tax Service of South Korea (NTS) identified 2,416 individuals who reportedly hid their assets in cryptos to bypass taxation. The agency stated that evaders used bitcoin (BTC), ethereum (ETH), ripple (XRP), among other cryptos, to avoid being scrutinized by the tax authorities.
According to the officials, assets involved in the tax evasion account for a total of 36.6 billion won ($32.24 million). Also, the NTS clarified they mainly targeted people owing over 10 million won ($8,800) in taxes.
Still, the tax authorities managed to recover hidden assets in cash and bonds. At the same time, they launched an investigation against 222 of those who allegedly evaded tax payments. The agency issued the following statement:
The recent probe was a part of our ongoing efforts to strengthen a crackdown on anti-social tax dodging. We will capture highly intellectualized (tax-evading) cases and quickly redeem their concealed properties.
Domestic Crypto Exchanges Collaborated With the NTS
The NTS stated they relied on domestic crypto exchanges to gather personal data from the alleged tax evaders. It included individuals’ trading reports and banking information, which fully complies with the strict regulations that currently rule the crypto sphere in South Korea.
Under the law, South Korean crypto exchanges must use the real-name system by partnering with a financial institution to provide this service.
Banks will be obligated to conduct customer due diligence on the crypto businesses they deal with, ensuring proper reporting to the Korea Financial Intelligence Unit (KOFIU).
Although it was enacted in February, the legislative clarified early this year that the new rule will start applying in 2022.
What do you think about the recent crackdown on tax evaders in South Korea? Let us know in the comments section below.