Seoul City Imposes Financial Disadvantages Including 7-Year Loan Restrictions on Local Tax Delinquents

1156 Defaulters Registered with Korea Credit Information Services
Targets Include Those Owing Over 50 Million KRW for More Than One Year
C Corporation Owes 4.3 Billion KRW, Individuals Owe Up to 1.4 Billion KRW

The Seoul Metropolitan Government has provided delinquent tax information of 1,156 local tax defaulters to the Korea Credit Information Services. The subjects are those who have overdue local taxes of 5 million KRW or more for over a year, or those who have three or more cases of local tax delinquency totaling 5 million KRW or more within a year. Going forward, these individuals will face not only a drop in their credit ratings but also restrictions on credit card issuance and loans for seven years.

According to the Seoul Metropolitan Government on the 11th, the city provided and registered all information including names, resident registration numbers, number of delinquency cases, and delinquent amounts to the Korea Credit Information Services. Among the 1,156 defaulters, 804 are individuals and 352 are corporations. The total number of delinquency cases amounts to 14,494, with a total delinquent amount reaching 64.8 billion KRW.

The 38 Tax Task Force, which tracks high-value tax delinquents owing more than 5 million won to collect taxes, has collected a total of 405.6 billion won over the past nine years.

The corporation with the largest delinquent amount is Corporation C, whose main businesses are overseas stock investment, real estate management, and real estate leasing. In April 2022, two cases of corporate local income tax were imposed, totaling 4.345 billion KRW in delinquency. Currently, investigators from the Seoul Metropolitan Government’s 38th Tax Collection Division are continuing tracking activities, including seizing real estate and lease deposits owned by the corporation.

The individual is Mr. D, who has two cases of local income tax (comprehensive income) imposed in January 2023, with a total delinquency of 1.41 billion KRW. An investigation into Mr. D’s assets found no confirmed assets such as real estate or automobiles, and the business he operated has been closed. Authorities are verifying whether there are any hidden or nominee assets.

Once local tax delinquency information is registered with the Korea Credit Information Services, the credit rating immediately drops, and for seven years after registration, the individual is classified as a financial delinquent, facing financial disadvantages such as restrictions on credit card issuance and loans under their name. The information provided by the city includes ▲name (corporate name for corporations) ▲resident registration number (business registration number or corporate registration number for corporations) ▲tax item ▲due date ▲delinquent amount (including settled amounts).

Since 2021, the city has strengthened financial disadvantages for citizens and corporations who deliberately delay even small amounts of tax payments, providing credit information if the total delinquency exceeds 5 million KRW. The city added that in addition to credit information registration, it also enforces strong administrative sanctions such as public disclosure of high-amount defaulters and travel bans.

Oh Se-woo, head of the 38th Tax Collection Division of Seoul, stated, "We are giving financial disadvantages through combined sanctions and information provision to raise awareness that even small amounts of deliberate delinquency can lead to financial penalties and to ensure compliance with tax payment obligations. For livelihood-related defaulters, we will continue thorough tax collection by preparing payment plans through systematic counseling."

Meanwhile, prior to this information provision, the city sent advance notices to about 1,400 defaulters on May 16, urging payment by May 31. As a result, 95 defaulters paid a total of 181 million KRW. Credit information registration is conducted once each in the first and second half of every year, and last year, information on 2,403 defaulters was registered with the Korea Credit Information Services, collecting a total of 4.6 billion KRW.