Things are getting worse for South Korean crypto investors. Fresh from the fact that their crypto exchange options shrunk to just four heavily audited platforms on Friday, they are now being told that their coins could be liquidated if they attempt to circumvent crypto trading and reporting protocols-and bailiffs could be sent to search their homes.
Crypto is not yet taxable in South Korea, but as of January 1, 2022, all crypto profits above $ 2,100 must be declared, and traders must pay a lump sum of 20% on their earnings above this threshold.
In addition, local branches of the National Tax Service (NTS) have carried out a nationwide crackdown on people they suspect of making crypto purchases to avoid income declaration. In this initiative, tokens worth millions of USD were seized and in many cases liquidated by the NTS, which demands not only overdue tax bills, but in some cases fines.
But Maeil Kyungjae reported that the Ministry of Strategy and Finance confirmed that the government “recently submitted to the National Assembly an amendment to the National Tax Collection Act”.
The latter almost certainly gives the green light to the proposal, which is bundled with further legislative changes and will rush through Parliament in the coming weeks.
Once legally binding, this will give the NTS sweeping new powers”to levy taxes on cryptocurrencies such as Bitcoin (BTC),” the media company noted.
Currently, tax officials only have the authority to confiscate cryptoassets from tax evaders by freezing and seizing coins on exchanges. However, the ministry confirmed that the new powers will allow tax officials to search apartments and other premises if necessary.
The measure will also give officials the right to convert crypto funds into fiat currencies wherever they find them. This means that officials could decide to liquidate (and then confiscate) client funds on a particular exchange, provided they feel they have enough evidence that the client in question has evaded taxes.
In Ukraine, meanwhile, MPs could consider draft crypto tax proposals that would tax individuals at a rate of 6.5% On crypto trading profits and companies at a slightly lower rate of 5%.
Mikhail Chobanian, the founder of the crypto-exchange Kuna, wrote on Telegram that the legislator “received proposed changes to the Tax Code “and considered that the idea was “cool, clear, simple and reasonable.”