Seoul City to Seize Goods at Customs if High-Value or Habitual Tax Delinquents Purchase Items Overseas or via Direct Importation

Request for Delinquent Tax Collection on High-Value and Habitual Tax Evaders' Imported Goods to the Korea Customs Service
Immediate Seizure of High-Value Items Carried at Entry, Seizure After Customs Hold on Overseas Direct Purchases

[Asia Economy Reporter Lim Cheol-young] High-value and habitual local tax delinquents who have overdue local taxes exceeding 10 million KRW and purchase luxury goods during overseas travel or buy items through overseas direct purchase have so far been able to clear customs by paying only customs duties, but from now on, their goods will be immediately seized by customs.

On the 4th, Seoul City announced that, according to the revision of the Local Tax Collection Act, it has entrusted the Korea Customs Service with the delinquent disposition of goods imported by high-value and habitual local tax delinquents. While seizure of imported goods was possible for national tax delinquents, seizure measures against local tax delinquents will be newly implemented this year.

When Seoul City entrusts the delinquent disposition of high-value and habitual delinquents to the Korea Customs Service, the Customs Service will seize high-value goods carried by delinquents upon entry on the spot, and hold customs clearance and seize imported goods purchased through overseas direct purchase to collect the delinquent amount.

The seizure targets include ▲ goods directly carried or possessed by the delinquent upon entry (carry-on goods) ▲ goods purchased directly from overseas via the internet and imported through delivery companies (express goods) ▲ general imported goods through trade contract agreements (general imported goods).

The delinquents entrusted by the city this time are those newly disclosed in 2021, with local tax delinquencies of 10 million KRW or more managed by Seoul City and its 25 autonomous districts. There are 1,127 high-value and habitual delinquents, and the total delinquent amount reaches 71.2 billion KRW. The highest individual delinquency is 1.273 billion KRW, and the highest corporate delinquency is 1.57 billion KRW.

Following the newly disclosed list of 2021, Seoul City will additionally proceed with the seizure of imported goods by the Korea Customs Service simultaneously with the disclosure of the list on November 16 for 2,812 people who received prior notice of the high-value delinquency list this year. The target for this year’s high-value and habitual delinquency list disclosure is 2,812 people, with a total delinquency amount of 143.2 billion KRW. The city has sent prior notices to them and plans to disclose the list on the Seoul City website on November 16 after a six-month explanation period.

Meanwhile, Seoul City established a special organization called the 38 Tax Mobile Unit in 2001, the first among local governments, to collect delinquent taxes from high-value and habitual delinquents. To respond to the increasingly diverse and sophisticated concealment methods of high-value and habitual delinquents, the city has been collecting delinquent amounts through house searches of actual residences, detection of disguised addresses, and verification of false property transfers. Recently, it has continuously developed new collection methods, including establishing legal grounds for the disposition of virtual assets (cryptocurrency).

Lee Byung-han, Director of the Seoul City Finance Bureau, said, “To prevent sincere taxpayers from feeling relative deprivation due to malicious delinquents, we will establish fair tax justice through stringent administrative sanctions such as public disclosure of high-value and habitual delinquents, travel bans, and provision of credit delinquency information, followed by strong delinquent collection measures such as seizure of imported goods.”