If Taxes Over 200 Million Won Are Unpaid for More Than a Year, Detention in Jail... National Tax Service Expands Detention System for Delinquents

[Sejong=Asia Economy Reporter Kim Hyunjung] Tax delinquents who have assets but have avoided paying taxes exceeding 200 million KRW for over a year will now be sent to detention centers.

According to the National Tax Service (NTS) on the 17th, under the revised National Tax Collection Act, the NTS plans to fully implement the detention system for high-amount and habitual tax delinquents starting in the second half of this year.

The National Tax Collection Act, revised in December 2019, allows for the detention of individuals who, despite having the ability to pay, have failed to pay national and customs taxes totaling 200 million KRW or more, three or more times, and for over a year without justifiable reasons, for up to 30 days in a detention facility. Although detention of delinquents became possible from December last year, one year after the revised law took effect, no delinquents have actually been detained so far.

Alongside this, the NTS plans to expand the forced collection of virtual assets from delinquents. In March, the NTS identified 2,416 delinquents holding virtual assets such as Bitcoin and collected approximately 36.6 billion KRW either in cash or through securing claims. This was the first case of forced collection of concealed virtual assets, and from the second half of this year, the NTS intends to increase such forced collections of virtual assets.

Through analysis of mortgage lien data and other sources, the NTS will also identify high-amount and habitual delinquents. For example, in cases where the statute of limitations on mortgage liens set through private transactions has effectively expired but the liens have not been properly canceled, causing tax payments to be deprioritized, the NTS aims to recover unpaid taxes.

The NTS will also conduct follow-up investigations on malicious delinquents who have illicitly transferred assets to related parties by analyzing income and expenditure details. They plan to develop a seizure and public auction system for delinquency management and enhance asset concealment analysis models to more precisely select targets for follow-up investigations.

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