South Korean legislators proposed revising the tax code so that tax officials could seize tax evaders’ crypto assets directly from their digital wallets.
According to a report published on July 26, the proposal is part of a comprehensive, annual review of the country’s tax system. This year, facing rising welfare costs to help sustain the aging population, legislators are looking to amend a total of 16 existing tax codes.
These amendments include redistribution measures to impose higher taxes on wealthy individuals and groups, in addition to cracking down on money laundering and tax evasion in sectors such as the digital asset industry.
While South Korean authorities can seize crypto assets already accessible through centralized exchanges, the amendment will expand their powers by extending to individuals’ personal wallets.
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Overall, the report said proposals for specific tax breaks to boost research and development in semiconductors, batteries and vaccines would result in a modest reduction in tax revenue for the government – $1.3 billion – in the revision package. . The tax incentive could also be applied to firms hiring workers outside the capital Seoul, as well as firms looking to restart their production capacity.
The finance ministry will reportedly submit all proposals to parliament by September 3, as lawmakers still need to approve the measures. As previously reported, Korea is set to introduce a 20% tax on bitcoin (BTC) and crypto profits from January 1, 2022 – a move that has faced significant backlash from the industry. The new arrangement will impose a 20% tax on all crypto trading capital gains over $2,300.
In April, Seoul’s tax authorities seized $22 million in crypto from individuals and company executives who owed taxes.