South Korean tax law has been amended by the Government for introducing pecuniary action against non-payers of crypto tax. The law authorizes law enforcement agencies to seize virtual assets if the taxpayers have failed to deposit the tax due. For carrying out seizures, the authorities wouldn’t be required to obtain court permission also.
It has been a while since when the South Korean government wants to go after tax evaders holding virtual assets. Firstly, they were urged by the Government to settle their outstanding tax dues towards virtual assets. However, only a handful of such taxpayers pay heed to the Government’s request. Thereafter, the Government announced that it will take action against non-depositors of crypto tax. Even the warning failed to put any pressure upon the taxpayers and they continued to ignore the warnings.
But now the Finance Ministry of the country has announced the passing of the Amendment Bill in respect of existing tax legislation. The Ministry informed that a bill called “2021 Tax Law Amendment” has been prepared which is pending approval. It was informed that the proposed amendment bill will be put up before the Parliament in the upcoming national tax review session.
The gist of the proposal Bill suggests that the Government has finally decided to take action against the non-depositors of crypto tax. It was suggested that the Government has authorized law enforcement agencies to seize crypto assets belonging to crypto tax evaders. If approved, the proposed legislation will empower the authorities to seize as well as sell seized virtual assets. For selling and seizing, the law directly gives powers to the authorities, and apparently, no court permission will be required by authorities.
The Finance Ministry explained that there is a huge increase in the number of crypto tax avoiders and that they are deliberately avoiding. The amendment in the tax law is therefore proposed to take proper action against those who are violating the tax laws.
The law further requires crypto exchanges to submit on demand the information and data belonging to their South Korean customers. The Government further clarified that crypto trading platforms must ensure strict adherence to the law and ensure their coordination with the authorities. If the concerned authorities would demand exchanges to transfer crypto assets, then they will immediately act upon the demand. Failing to meet the demand, would entail initiation of legal action against the crypto firms as well, warned the South Korean Government.
It was further clarified that in the event of non-compliance, assets and premises of the firms/individuals will be thoroughly searched. The authorities will be fully empowered to confiscate any and all assets in the case of non-coordination.
The Ministry also apprised that the seized virtual assets will be auctioned by the authorities for the settlement of the tax dues. In addition, the amounts collected from the sales of seized goods will be deposited in the government treasury, told Ministry.