On the morning of the 14th, when bitcoin broke a record high of 70 million won in Korean exchanges for the first time, the prices of cryptocurrencies including bitcoin are displayed on the market board at Bithumb Gangnam Customer Center in Gangnam-gu, Seoul. Newsis
Mr. A, who runs a hospital in Gangnam-gu, Seoul, was included in the list of delinquents managed by the National Tax Service because he did not pay taxes of 2.7 billion won, including income tax. In the meantime, even though living in luxury apartments, such as living in luxury apartments, the assets that could be collected were not identified, so the National Tax Service had been running around. This is because Mr. A had the money he earned in the hospital and turned it into a virtual asset that the IRS could not reach.
However, the situation has changed recently as the National Tax Service has been able to collect virtual assets forcibly. When the IRS seized Mr. A’s virtual assets worth 3.9 billion won, he immediately paid the full tax. As of January, at the time of the seizure, the value of virtual assets was about 40 million won per bitcoin, because Mr. A thought the virtual asset price would rise further.
Tax return by preventing withdrawal from the exchange as a precedent
The National Tax Service announced on the 15th that it found 2,416 people who had virtual assets among those who were delinquent paying national taxes and collected a total of 36.6 billion won in cash or secured them as bonds. It turned out that many delinquents had virtual assets instead of real assets such as cash, real estate, and stocks to avoid paying taxes.
The IRS recovered the tax by preventing delinquents from withdrawing their assets from the virtual asset exchange. This method was made possible thanks to the precedents in the past. The Supreme Court ruled in May 2018 that “virtual assets are intangible assets with property values that are subject to confiscation”. Prior to this, the Seoul Central District Court and the Ulsan District Court recognized virtual assets △issuance claim bond (right to take out from electronic wallet) △right to request performance for transmission and sale, △right to claim for return, and △right to claim payment as seizure targets.
Based on this, the National Tax Service received the status of virtual assets of over 10 million won in arrears from domestic virtual asset exchanges such as Bithumb and Upbit earlier this year, and took measures to seize them. As the virtual assets were seized through the exchange and the forced disposal was announced, the delinquents, who believed that the value of the virtual assets would increase further, began to pay taxes on their own.
As such, virtual assets including bitcoin will not be used as a window to hide criminal proceeds in the future. As virtual assets gradually enter the institutional sphere, such as the Special Financial Information Act enacted on the 25th, tax avoidance through virtual assets is expected to become more difficult.
An official from the National Tax Service said, “From the 25th when virtual assets are included in the specific financial information law, the virtual asset exchange is also obligated to report suspected illegal property transactions and high-value cash transactions, and the basis for collecting arrears in this manner becomes more clear.” .
In the morning of the 15th, Chung Cheol-woo, head of the Taxation and Legal Affairs Bureau at the National Tax Service, said that he secured 36.6 billion won in cash and bonds for 2416 high-payers who concealed their assets using virtual assets such as bitcoin at the government’s Sejong 2nd building. Sejong = Newsis
A lot of virtual assets go up… The possibility of collection increases
As the value of virtual assets has increased a lot recently, the incentive for delinquents to pay taxes has increased. As of the end of 2018, the value of bitcoin, which was 4.27 million won per piece, has recently exceeded 70 million won. The IRS is planning to collect taxes by selling the seized virtual assets, but if it determines that the value will increase even further, it may be advantageous to raise money through other methods like Mr. A.
In consultation with the National Tax Service, some have converted virtual assets that have already increased in value into cash and paid them as tax. Mr. B, who sold the real estate in Gyeonggi-do for 4.8 billion won and then paid 1.2 billion won in capital gains tax, converted the virtual assets worth 1.2 billion won into cash and paid it as tax when the National Tax Service seized it.
“We will cash in at an appropriate time in consideration of the price trend of virtual assets,” said Jung Cheol-woo, director of the Taxation and Taxation Affairs Bureau of the National Tax Service. “If there is a new method, we will respond quickly and track the hidden assets of large delinquents until the end.”
Sejong = Park Se-in reporter [email protected]
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