Seoul City Immediately Seizes Court Deposits of 35.4 Billion KRW from 363 High-Value Tax Delinquents

Nationwide Court Deposit Ownership Survey of High-Amount Tax Delinquents

[Asia Economy Reporter Lim Cheol-young] # Tax defaulter A is a long-term high-amount defaulting corporation that has not paid a total of 1.065 billion KRW for seven cases, including 946 million KRW in corporate local income tax imposed in 2013. Through an investigation, the Seoul Metropolitan Government confirmed that 1.549 billion KRW was deposited in the Seoul District Court in January 2019 and immediately seized the entire amount.

# The Seoul Metropolitan Government confirmed that tax defaulter B, who defaulted on 123 million KRW in personal local income tax imposed last year, had deposited 1.73 billion KRW, more than ten times the amount of the unpaid tax, in two courts including the district court in February last year, and seized the deposited funds.

On the 29th, the Seoul Metropolitan Government announced that it conducted a full survey of deposit data under the names of high-amount tax defaulters at courts nationwide through the Supreme Court, confirming deposit details of 854 people amounting to 55.6 billion KRW, and immediately seized deposits of 363 people, 453 cases, totaling 35.4 billion KRW. Their total unpaid tax amounts to 113.8 billion KRW.

The deposits under the names of tax defaulters held at courts nationwide, which Seoul City seized this time, are classified into deposits directly entrusted by the defaulters themselves to the court for debt repayment, and deposits entrusted by third parties as collateral for damages in lawsuits against the defaulters. The amounts are returned to the defaulters depending on the outcome of the lawsuits or cases.

Seized deposits will be collected immediately by exercising the right to request disbursement and recovery at the court holding the deposits. Deposits that cannot be disbursed or recovered due to ongoing cases will be managed afterward to collect unpaid taxes. If the defaulter is the depositor, the right to claim recovery of the deposit upon case closure is seized; if the defaulter is the depositary, the right to request disbursement of the deposit is seized for collection.

According to Seoul City, deposits without payment restrictions and with completed case closure amount to 16.6 billion KRW. Seoul City plans to immediately request disbursement to apply these funds to unpaid taxes. For deposits amounting to 39 billion KRW that have payment restrictions or ongoing court cases preventing disbursement or recovery requests, Seoul City will continuously monitor the timing of lifting payment restrictions and case closure status.

Seoul City plans to actively exercise subrogation rights stipulated by relevant laws, such as issuing collateral cancellation decisions and certificates of finality to claim recovery, or issuing rights exercise notices to depositaries and filing lawsuits for subrogation collateral cancellation for deposits where collateral cancellation has not yet been made, to enforce the rights of the seizure holders.

Lee Byung-wook, head of the 38th Tax Collection Division of Seoul City, said, “Recently, cases of using deposits as a means to resolve private debts between individuals to avoid seizure of tax claims while not paying overdue taxes have increased.” He added, “The 38th Tax Collection Division will lead the realization of tax justice by strictly responding to increasingly sophisticated tax defaulters’ asset concealment, expanding from recent financial sector-wide investigations such as virtual asset seizures by local governments nationwide and investigations into cashier’s check issuance records to the non-financial claims sector.”

This content was produced with the assistance of AI translation services.