The South Korean tax agency has told crypto holders that officers will visit their homes to seize cold wallets if they fail to pay their tax bills.
The South Korean newspaper Hankook Ilbo reported that the comments came from the National Tax Service (NTS) on October 9.
But the NTS’ warning shows that the agency is aware that many crypto holders keep their coins offline, using self-custody solutions. An agency spokesperson said: “We can now monitor a non-compliant taxpayer’s crypto transaction history using [blockchain protocol] tracking programs. And if we suspect they are hiding their coins offline, we can conduct searches at their homes, confiscating [hard drives or PCs].”
Tax bodies around the country have already launched crackdowns on local tax evaders that hold crypto wallets on domestic trading platforms.
And while the Multilateral Tax Administration Cooperation Agreement allows Seoul to work with 74 nations on tax collection matters, this may not be enough.
However, one notable blind spot appears to be standing in the NTS’ path. The newspaper wrote: “Problems occur in cases where non-compliant taxpayers use overseas crypto exchanges. Since domestic law does not apply overseas, the [NTS] must rely on the cooperation of foreign governments to determine the nature of a delinquent taxpayer’s assets.”
