Incheon City Cracks Down on Crypto Tax Evaders

The city of Incheon, South Korea, has seized over $375,000 worth of cryptocurrencies from tax dodgers, according to a report by Cryptonews. This is the latest move by the local authorities to collect overdue taxes from individuals and businesses that hold digital assets.

How Incheon City Seized Crypto from Tax Evaders

The city of Incheon, located in the northwest of South Korea, has been conducting a tax investigation on 2,000 people who owe more than 1 million won ($750) in taxes. The investigation revealed that 513 of them had cryptocurrency accounts on three major exchanges: Upbit, Bithumb, and Coinone.

The city then requested the exchanges to freeze the accounts and transfer the crypto assets to the city’s treasury. The total amount of crypto seized was 432 million won ($375,000), which included Bitcoin, Ethereum, XRP, and other tokens.

The city plans to use the seized crypto to pay off the tax debts of the delinquents, and return the remaining amount to the owners. The city also warned that it will continue to monitor the crypto holdings of tax evaders and take legal action if necessary.

Why Crypto Tax Evasion is a Problem in South Korea

Crypto tax evasion is a serious problem in South Korea, as many people use digital assets to hide their income and assets from the authorities. According to a report by Yonhap News, the South Korean government confiscated as much as 260 billion won ($180 million) worth of cryptocurrencies from tax evaders in 2022 and 2021 combined.

The government has also enacted laws that allow regulators to seize cryptocurrencies from tax delinquents since 2021. The laws require crypto exchanges to verify the real names and identities of their customers, and report any suspicious transactions to the tax authorities.

The government is also preparing to implement a 20% tax on crypto trading profits above 2.5 million won ($2,300) from January 2022. The tax regime aims to prevent tax avoidance and ensure fair taxation for all income sources.

How Crypto Users Can Avoid Tax Trouble in South Korea

Crypto users in South Korea can avoid tax trouble by following some simple steps:

• Keep track of your crypto transactions and profits, and report them accurately to the tax authorities.
• Use only registered and compliant crypto exchanges that follow the real-name verification and reporting rules.
• Pay your taxes on time and in full, and avoid hiding or transferring your crypto assets to evade taxes.
• Seek professional advice from tax experts or lawyers if you have any doubts or questions about your tax obligations.

By following these steps, crypto users can enjoy the benefits of digital assets without risking legal penalties or losing their crypto to the government.