The South Korean government has proposed to amend the tax law to allow the country’s tax authorities to confiscate and sell cryptocurrencies that are owed to taxpayers. “The amendment will allow direct seizure without court approval to change ownership records. Assets held by tax evaders in the form of digital coins will no longer evade seizure and confiscation,” a government official said.
The South Korean government hopes to confiscate and sell cryptocurrencies owed to taxpayers
- South Korea’s Ministry of Finance announced on Monday the amendments to the 2021 tax law as part of the government’s annual review of its tax system.
- According to the Korea Times, the bill includes a proposal to authorize the National Taxation Service (NTS), the country’s tax authority, to confiscate and sell cryptocurrency belonging to tax owors from January 1, 2022.
- The government explained that the number of cases where tax debtors use cryptocurrency to hide their assets is increasing. The bill aims to combat tax evasion by cryptocurrency owners.
- According to the proposed law, cryptocurrency exchanges must cooperate with the authorities and immediately transfer cryptocurrencies to the government upon request.
- If the regulations are not followed, the authorities may search the property and confiscate assets if the authorities deem it necessary. The proceeds from the sale of seized crypto assets will go to the national treasury.
- South Korean lawmakers expressed concern that it is difficult for current regulations to confiscate crypto assets, which must be done in accordance with existing bond seizure regulations. The publication stated that not only the process may be controversial, but the ownership record changes approved by the court also do not apply to encrypted assets that lack physical presence.
- A ministry official said:
If the assets requested by the government are stored in an electronic wallet, they cannot apply for property seizure procedures. The amendment will allow direct seizure without court approval to change ownership records. Assets held by tax evaders in the form of digital coins will no longer escape seizure and confiscation.
- “Tracing tax evaders is part of a broader investigation in South Korea, which aims to strengthen the supervision of the cryptocurrency market to eradicate money laundering and other financial crimes using cryptocurrencies, because President Moon Jae-in hopes to expand the tax base to fund increased welfare expenditures. “Described by Reuters.
- The Ministry of Finance stated that it will submit amendments to 16 tax laws before September 3. The proposal requires legislators to approve before it can be implemented.
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