Gyeonggi Province Collects Millions in Undeclared Taxes Through Crypto Asset Tracking
In 2023, Gyeonggi Province in South Korea successfully recovered millions of dollars in tax revenue from individuals who evaded paying taxes on their crypto assets. By implementing a specialized electronic management system, the Gyeonggi Tax Justice Department was able to track and seize virtual assets belonging to tax evaders.
Streamlining the Process for Delinquent Tax Collection
Prior to the introduction of the tracking software, the Gyeonggi government relied on manually sending lists of offenders to crypto exchanges to verify their membership registration. This process was time-consuming, taking up to six months for completion.
With the new management system in place, the entire process now takes approximately 15 days. The software utilizes residents’ registration numbers to trace their phone numbers on crypto exchanges, allowing for efficient tracking, seizure, and sale of assets to cover undeclared taxes.
Improved Success Rate and Uncovering Unpaid Taxes
The implementation of the new system has significantly enhanced the success rate of identifying delinquent membership registrations on crypto exchanges. Additionally, it has led to the discovery of around 5,910 individuals with unpaid taxes amounting to 3 million won ($2,200) each, who operated crypto wallets containing various assets including bitcoin (BTC).
As a result, the Gyeonggi government managed to collect 6.2 billion won ($4.67 million) from approximately 2,390 individuals.
Fostering Collaboration with Crypto Exchanges
The success of the new system has prompted Gyeonggi Province to seek cooperation with crypto exchanges. The government aims to establish enforcement measures against platforms that refuse to comply with inquiries regarding tax evasion.
Hot Take: South Korea Takes a Strong Stance on Tax Evasion in the Crypto Space
The recent actions taken by Gyeonggi Province in South Korea demonstrate a firm commitment to combat tax evasion in the crypto industry. By leveraging advanced tracking software, the government has successfully recovered millions of dollars in undeclared taxes from individuals who attempted to evade their obligations.
This serves as a reminder that tax authorities worldwide are increasingly focusing their attention on crypto assets. As a crypto enthusiast, it is crucial to stay informed about your tax obligations and ensure compliance with relevant regulations to avoid potential legal consequences.
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