The National Tax Service visits the home of Mr. A, who failed to report capital gains tax after transferring a commercial property located in Nowon-gu, Seoul, and discovers cash and valuables./Courtesy of National Tax Service

The National Tax Service will identify and track 710 habitual tax delinquents who have hidden assets to evade taxes.

On the 10th, the National Tax Service announced that it has categorized the delinquencies into three main types: evasion of compulsory collection, asset concealment, and extravagant luxury, identifying 710 habitual tax delinquents. The taxes these individuals have evaded amount to nearly 1 trillion won.

The first type, evasion of compulsory collection, includes delinquents who have divorced on paper but continue to live together, partitioning assets to a spouse. It also includes those who donate assets to religious groups they have special relationships with or gift listed shares to family and relatives. Also included are individuals who inflate possible dividends under corporate law to engage in irregular dividend distribution and evade tax imposition on corporations from the reporting stage. There are 224 individuals caught by the National Tax Service for such actions.

The National Tax Service plans to file lawsuits to annul fraudulent transactions against these individuals and prosecute delinquents and related parties if evasion of tax disposition is confirmed. Annulment of fraudulent transactions refers to a creditor canceling the acts of a debtor that reduce the debtor's assets and restoring the disposed assets to the creditor's possession.

Mr. B, the representative of an electronics wholesale corporation, accumulates value-added taxes through false invoices. The National Tax Service discovers a bundle of 100,000 won checks disguised as trash covered with newspapers while searching Mr. B's address./Courtesy of National Tax Service

The second type, asset concealment, involves delinquents who register real estate under the names of related parties before and after delinquency occurs, or receive income amounts, sales claims, and lending rights through borrowed-name accounts. It also includes delinquents who set up VIP bank safety deposit boxes to hide high-value assets such as cash, large checks, and gold bars while not paying taxes. A total of 124 individuals have been identified for the second type.

Regarding real estate registered under borrowed names, the National Tax Service plans to file lawsuits to claim ownership cancellation. For borrowed-name accounts, the agency will trace usage through financial inquiries and seal or seize the safety deposit boxes.

Mr. C, the representative of a brokerage firm, accumulates tens of millions in corporate tax and comprehensive income tax. After an undercover investigation, it is revealed that Mr. C resides in a high-priced house rented under his children's names. The National Tax Service seizes cash bundles, valuables, and luxury watches that were hidden in a personal safe during the residence search./Courtesy of National Tax Service

The final type, extravagant luxury, includes individuals staying in hotels with domestic and foreign casinos, gambling without paying taxes. It also includes delinquents who purchase high-priced luxury goods from department stores and boutique stores, as well as those with excessive consumption expenditure for themselves or non-income-earning family members. This type also covers individuals who falsely transfer their residence to disguise their move while actually living in high-priced dwellings without paying taxes.

The Fair Trade Commission is conducting field collection activities such as reconnaissance, stakeouts, and searches at locations suspected of asset concealment, using big data analysis systems on actual residences of these delinquents.

Last year, the National Tax Service conducted 2,064 field searches to uncover hidden assets of tax delinquents and filed 1,084 civil lawsuits to recover diverted assets. A total of 423 individuals who evaded or assisted in evading tax dispositions were penalized. Through these efforts, the National Tax Service collected 2.8 trillion won in cash and secured claims via asset tracking investigations.

The National Tax Service stated, 'We will strongly implement all compulsory collection measures, including asset tracking investigations, disclosure of names, and travel bans against habitual tax delinquents to enforce tax justice.' It also added, 'We will enhance support for livelihood tax delinquents and taxpayers affected by export declines due to changes in US trade policies to help them overcome liquidity crises.'