Due to the different regulatory policies on cryptocurrencies in countries around the world, there are also significant differences in the tax policies on cryptocurrencies. However, with the development of blockchain technology and the growth of the cryptocurrency market, the issues of tax evasion and taxation have become increasingly important for regulatory authorities in various countries.
South Korea warns it will sell the cryptocurrency assets of tax debtors
Just yesterday (18th), according to Korean media reports, Paju City in Gyeonggi-do Province, South Korea, announced that it will directly sell the virtual assets held by tax debtors to collect unpaid taxes. The city government has issued notices to 17 tax debtors who owe a total of about 124 million won (about $88,600), warning them that if they do not pay the taxes by the end of the month, the government will transfer and auction off their virtual assets worth 50 million won (about $36,000).
The city has already seized the virtual assets of the tax debtors through cryptocurrency exchanges. Paju City has previously seized the virtual assets of tax debtors, but this is the first time it has attempted to directly sell these virtual assets, which is also the first case among local governments nationwide to conduct such a direct sale of virtual assets.
The report states that as virtual assets become more widespread, more and more tax debtors are using virtual assets to conceal or transfer their assets in an attempt to evade tax collection. However, a Paju City government official emphasized:
This sends a clear message to tax debtors that they cannot hide their assets, and the government will track down the property of tax debtors until the taxes are paid.
Taiwan will introduce a tax audit method within 3 months
Yesterday, KMT legislator Lai Shih-bao questioned the issue of cryptocurrency taxation in Taiwan during a legislative session. He pointed out that the current focus of cryptocurrency taxation is mainly on businesses, and the measures taken by the Ministry of Finance for individual transaction taxation and auditing are still insufficient.
Sung Hsiu-ling, the director-general of the Taxation Administration, responded that the current cryptocurrency taxation is based on self-declaration, so the government needs to strengthen the audit mechanism. She emphasized that the Ministry of Finance will introduce new audit measures after the Financial Supervisory Commission establishes a special law on virtual assets.
Finance Minister Chou Chui-yun then promised that the Ministry of Finance will introduce a method for auditing cryptocurrency transaction income tax within 3 months. She stated:
"Since cryptocurrencies have been defined as virtual assets rather than currency, their transaction income should be subject to income tax according to the law. We will then discuss how to effectively audit and improve the relevant measures."
With the "enhanced tax audit method" in Taiwan taking shape, it is worth continuing to follow whether the authorities will refer to the South Korean approach in the future, seizing the virtual assets of tax debtors through exchanges, or even directly liquidating them to collect taxes.
Further reading: Ministry of Finance: Profits from buying and selling Bitcoin are subject to taxation! A "enhanced tax audit" method will be formulated within 3 months
