Opportunity to Buy Cheaper Than 'Danggeun'... 'Tax Delinquent Seized Goods Auction' Market Opens

Seongnam-si, Gyeonggi Province, Public Auction at Kintex
Items Seized from High-Value Tax Delinquents
Unique High-Value Items Including Art and Collectibles

Seongnam City in Gyeonggi Province has announced that it will auction off various seized items to collect taxes from high-value delinquent taxpayers, drawing significant attention. Among the items disclosed are numerous expensive luxury goods such as precious metals, luxury watches, bags, golf clubs, and alcoholic beverages.

On the 11th, Seongnam City revealed that these items will be publicly sold on the 13th at KINTEX in Ilsan, Goyang City, Gyeonggi Province. The auction includes a total of about 700 items, such as 181 luxury bags, 48 luxury watches, 449 pieces of precious metals, golf clubs, and whiskey.

Among these, 16 items including luxury bags and precious metals will be auctioned this time. All these luxury goods were seized from the homes of high-value delinquent taxpayers, and the collected amount from forced sales will be used to recover the outstanding taxes.

Items listed for public auction. [Image source=Gyeonggi-do Public Auction Site]

Bidding qualifications are limited to on-site participants, who can place bids using their smartphones or laptops provided at the venue. The bidding method is individual per item, and the highest bidder who offers a price above the appraised value during the bidding period wins the item. Auction items can be viewed on the online electronic auction website.

From Various Luxury Goods to Artworks and Collectibles at Auction

Since 2015, Gyeonggi Province has been conducting on-site auctions of items seized from the homes of high-value delinquent taxpayers. Especially in 2020, during the height of the COVID-19 pandemic, a non-face-to-face online electronic auction was held, allowing anyone except the delinquent taxpayers and related parties to participate.

The popularity of auctions for seized items from delinquent taxpayers has been increasing every year. In 2019, there were only about 1,500 participants, but the following year, participation surged to over 8,000, more than a fivefold increase. The website recorded over 800,000 visits.

The secret to this popularity is said to lie in the auction items. Various luxury goods and precious metals, as well as unique items such as artworks by mid-level artists, old books, and violins crafted by artisans, attract the attention of collectors.

The success of the auctions also benefits the provincial finances. In 2020, the province covered 460 million KRW in local tax revenue, including 260 million KRW from auction proceeds and 200 million KRW collected in full from delinquent taxpayers.

Collection Rate for High-Value and Habitual Delinquent Taxpayers Has Not Exceeded 0.5% in the Past Five Years

Collection performance for high-amount, habitual tax delinquents remains insufficient.
[Image source=Yonhap News]

Local governments are exploring unique methods such as auctioning seized items to collect delinquent taxes due to the low collection rates from high-value delinquent taxpayers.

According to data received by Yang Kyung-sook, a member of the Democratic Party of Korea, from the Korea Customs Service on the 2nd, the total amount owed by 249 high-value and habitual delinquent taxpayers publicly disclosed last year reached approximately 1.7 trillion KRW.

However, as of the end of July this year, the amount collected from these individuals was only 190 million KRW, which is just 0.02% of the total delinquent amount.

The collection performance for high-value and habitual delinquent taxpayers has not improved over the past five years. The collection rates were 0.45% in 2017, 0.16% in 2018, 0.25% in 2019, 0.34% in 2020, and 0.13% in 2021, with delinquent amounts accumulating each year, failing to exceed the 0.5% mark.

The Korea Customs Service is implementing administrative sanctions to collect delinquent taxes from high-value habitual taxpayers, including public disclosure of personal information, requesting travel bans for delinquent taxpayers, and providing delinquent taxpayer information to credit information agencies.