Keywords in this story
Tax agency vows to go tough after Koreans use crypto to evade levies – Taxes Bitcoin News
The South Korean tax authority has pledged to take strict measures against tax evasion through virtual assets and platforms. While the Korean government has yet to begin taxing capital gains resulting from crypto investing and trading, authorities in Seoul claim that cryptocurrencies have been actively used for money laundering. .
Korean citizens accused of investing in crypto assets to dodge taxes
The National Tax Service (NTS) of South Korea intends to take tough action against tax avoidance practices based on virtual assets, such as cryptocurrencies, and the platforms operating with them, the Korea Herald has informed its readers, quoting an agency representative.
A growing number of Koreans are reportedly seeking to evade taxes by investing in crypto assets after shifting their fortunes to tax havens like some countries in the Caribbean Basin and Southeast Asia, the official said on Monday.
During the authority’s policy briefing before the Strategy and Finance Committee of the National Assembly, the Korean parliament, the official explained that this type of new tax evasion hinders justice in the market as well as fairness in matter of taxation.
Although the NTS has not yet implemented taxation of gains from cryptocurrency trading, these assets have been actively used for money laundering, he pointed out. The official cited different cases involving such behavior on the part of taxpayers. In one, the owner of a hospital in Seoul owed 2.7 billion won ($2 million) in income tax.
The man, who resided in the Gangnam district of the Korean capital, insisted he earned nothing. However, the tax department was able to establish that he had invested 3.9 billion won (nearly $3 million) in the cryptocurrency. He was forced to fulfill his obligations to the state after the NTS seized his crypto account. The crypto was also allegedly used to evade inheritance and gift taxes.
NTS officials have also admitted that online platform operators are a prime target for the agency. It is claimed that a growing number of them are seeking to relocate their e-commerce servers abroad, to avoid taxation, including in tax havens.
South Korean authorities recently postponed a 20% tax on crypto-related gains again until 2025. The tax was due to come into effect in January next year for capital gains exceeding 2, 5 million won ($1,900). The government delays in imposing the levy for the second time as the original plan was to introduce it in January 2022.
What do you think of the South Korean tax department’s intentions regarding crypto investments? Tell us in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.