New law in South Korea lets government get their hands on crypto holdings
Tax dodgers could see their cryptocurrencies seized by the government.

On July 26, the South Korean Treasury Department announced that it would tighten tax evasion rules for cryptocurrency investors and big earners. In this way, new income is to be generated in order to cover the increasing social expenditures. Starting next year, the government plans to revise the tax laws so that the tax authorities can break into crypto possessions of tax evaders, even if their cryptocurrencies are stored in a digital wallet. Under current laws, it is difficult for the authorities to seize virtual assets held in digital wallets. However, those available through exchanges may be confiscated to pay overdue taxes. The prosecution of tax evaders is part of South Korea's broader examination of tightening crypto market surveillance to prevent money laundering. And other financial crimes using cryptocurrencies as President Moon Jae plans to expand the tax base to increase social spending. The government has raised taxes on high earners to ensure wealthy citizens take responsibility for the rising costs of an aging population. Also, according to 2020, South Korea is the fastest aging nation in the world with the lowest birth rate. This proposal is one of the pillars of the government's annual review of the tax system, which plans to change a total of 16 tax laws. According to the ministry, the changes will result in a decrease in tax revenue of at least 1.5 trillion won by 2026, as tax developments and research in the fields of batteries, semiconductors and vaccines more than offset the expected additional revenue of top earners. South Korean Finance Minister Hong Nam-ki said that 1.5 trillion won could not be defined as tax neutral as it is not a huge amount that will play an important role in the revision of tax laws. The government also proposed significantly expanding tax breaks for companies hiring outside the capital, Seoul, and lowering corporate taxes for companies relocating production facilities. The statement also said the ministry will submit the tax review to parliament by September 3, as the program must be approved by lawmakers to be enforceable.





