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South Korea to tighten penalties for tax evasion using cryptocurrencies

The National Tax Service of South Korea (NTS) will take strong action against tax evasion using virtual assets such as cryptocurrencies and platforms that work with them.

More and more Koreans are looking to evade taxes by investing in crypto assets. Also, officials say, they are moving their fortunes to tax havens like some of the Caribbean and Southeast Asia.

Officials cited the story of a man living in Seoul who insisted that he did not earn anything. However, the tax service managed to establish that he invested 3.9 billion won (about $3 million) in cryptocurrencies. The man was forced to fulfill his obligations to the state after the NTS arrested his crypto wallet. Cryptocurrencies have also been used to evade inheritance and gift taxes.

Representatives of the NTS recognize that online platform operators are the main target of the regulator. It is argued that a growing number of sites are seeking to move their servers abroad to avoid taxation, including in the very countries of asylum.

Earlier, the South Korean government postponed for two years the entry into force of a 20% tax on cryptocurrencies. The new law was to come into force on January 1, 2023.

Source: Bits

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