Hiding your cryptocurrencies from taxes can be very expensive: $183 million seized in South Korea
The hunt for (bad) taxpayers begins – The south korean government is used on the crypto plates of residents who have tax arrears. The taxation of cryptocurrencies may not be happening anytime soon in South Korea, but the law already gives the IRS sweeping powers over crypto investors.
Taxes in South Korea: cryptos to pay off debts
Tax collection has a bitter taste for cryptocurrency holders. Thus, the South Korean authorities authorized the seizure of digital assets for the payment of back taxes.
The tax authorities will then not have waited long to apply this arrangement. The government took over 260 billion Korean wonis around $180 million in cryptocurrencies, during the last two years, with the taxpayers concerned.
As a one-person illustration, authorities seized a Seoul resident’s account on a cryptocurrency exchange. This account held 12.49 billion won, or approximately $88.7 million in digital assets, including $2.3 million in Bitcoin (BTC) and $1.3 million in Ripple (XRP).
The seizure would have convinced the South Korean taxpayer to pay his back taxes. He reportedly settled his debts and asked for the sale of his digital assets to stop. The law allows the South Korean authorities to sell these seized cryptocurrencies at their market value.
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Seizures in the absence of a tax: carryovers from one year to another
The South Korean tax authorities have therefore found a way to fill the state coffers, using the accounts on the crypto platforms of bad payers.
For taxpayers residing in the country who still have tax debts, these foreclosures qualify the rhetoric that South Korea would be tax-efficient for crypto investors.
Last July, the country’s authorities announced a two-year postponement of the application of the law on cryptocurrency taxes. This tax was first announced in January 2021 and was to be implemented this year. However, the government does not yet seem to have decided to take the plunge.
Countries like South Korea, take time to lay down regulations specific to cryptocurrencies and criticize – often or sometimes – them. These prevarications and attacks do not prevent governments from using cryptocurrencies for the benefit of public finances.
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