- After introducing the guidelines on unpaid taxes in 2022, the tax collecting authorities started to collect the non-payment of taxes by seizing digital assets.
- The reports state that authorities seized cryptocurrency from a single errant taxpayer for nearly $8.87 million (USD).
- Among the 20 cryptocurrencies in the market, the users mostly owned Bitcoin and Ripple in the country.
- After collecting the data of unpaid tax users, the authorities will seize the virtual assets, and the seized assets are going to be sold at the market price.
- And, in response to a strong negative reaction from institutions, a 20% tax on digital asset profits was set to be implemented in 2025.
According to the reports, South Korea seized $184 million worth of US dollars in digital assets due to non-payment of taxes by the investors. For about two years, the country collected $260 billion won due to unpaid taxes. If cryptocurrencies are not listed on exchanges, it will be difficult for regulators to calculate the digital asset price.
In the Eastren part of Asia, South Korea has taken the step of imposing a 20% tax on the country’s digital assets at the start of the year 2022. Later, the government took back the step due to a negative response from investors. The regulators stated that the upcoming “Digital Assets Basic Act” will help to regulate digital asset availability in the nation. They also added that the crypto tax will be implied after providing market infrastructure in the middle of the year.
“Peer-to-Peer (P2P) trade takes up a certain amount of digital transactions today. And when taxation starts, many will move away from exchanges to P2P transactions to avoid paying taxes.”
Until now, the National Tax Service did not have certain regulations to track down on Peer-to-Peer (P2P) transactions.
“The right thing is to institutionalize these activities and build the tax laws around them that Korea is lacking today.”
As per the emerging innovation in digital currency, the South Korean government has to change the new regulations to encompass virtual assets, airdrops, and cryptocurrency.
Source: https://www.thecoinrepublic.com/2022/09/22/due-to-unpaid-taxes-the-republic-of-korea-seized-184-million-usd-in-virtual-assets/