South Korea Tax Agency Adds Crypto Tracking Programs, Upgrades AI Forensics in Evasion Crackdown

South Korea’s National Tax Service will strengthen its response to tax evasion involving virtual assets, or digital assets, including by adding more transaction-tracking programs.

In an Aug. 12 tax administration plan centered on overhauling delinquent-tax management and rooting out antisocial tax evasion and nonpayment, the agency said it will introduce additional digital-asset transaction-tracking programs and upgrade its artificial intelligence-based forensic system. The aim is to expand infrastructure for tracing cases in which virtual-asset transactions are used for tax evasion or asset concealment.

The agency also plans to encourage more tipoffs on tax evasion and hidden assets as part of institutional changes to expand reward payments for such reports. It included enforcement against tax evasion using digital assets among its key tasks for strengthening tax justice.

The National Tax Service will also tighten oversight of large tax arrears. It said it will operate a 10,000-member management team for overdue national taxes and other state revenue to assess outstanding arrears that have accumulated to 130 trillion won ($93.9 billion).

The team will check delinquent taxpayers’ circumstances through phone consultations and site visits, classify them by type and then carry out tailored collection efforts.

The agency said it will focus its tax-audit capacity on antisocial tax evasion. That includes real-estate tax evasion linked to cut-rate transfers and sham transactions used to avoid heavier taxes on owners of multiple homes, as well as tax evasion tied to unfair stock-market practices such as stock-price manipulation, duplicate listings and share-price suppression.

Investigators will also target conduct that harms ordinary consumers, including improper gains from the private use of corporate assets such as ultra-luxury homes and supercars, as well as illegal activity aimed at the public.