Misunderstanding Sparked by National Tax Service Chief's Mention of "AI" in Inaugural Address
Recently, claims have been spreading on YouTube and other platforms that "starting in August, even a transfer of just 500,000 won between family members will be tracked by the National Tax Service and could be subject to gift tax." The National Tax Service has dismissed these claims as "groundless rumors."
As of August 2, several videos had been uploaded to YouTube with titles such as "From August, you cannot transfer more than this amount between family members" and "From August, the National Tax Service's artificial intelligence (AI) will track the flow of money." Some of these videos have garnered over 2 million views.
These videos claim that, starting August 1, the National Tax Service will use AI to automatically analyze all transactions in personal accounts to collect taxes, and that gift tax will be imposed if more than 500,000 won is exchanged between family members. Some finance-related influencers and tax accountants are also presenting similar claims as facts, sharing content such as "how to avoid a tax bomb." One influencer even argues that if you transfer 1 million won per month for 10 years as living expenses, you will be charged at least 10 million won in gift tax.
However, these claims are different from what the National Tax Service has officially announced. The National Tax Service previously stated that there is no new system being launched in August to monitor small personal transactions.
An official from the National Tax Service said, "We operate our own computerized system to detect tax evasion, but unlike before, we do not investigate all personal accounts at random," and added, "We are not operating any new system to monitor small transactions." Experts also evaluated these rumors as unrealistic, saying there is no need to monitor account transfers between family members or acquaintances that are within common sense.
The spread of such claims on YouTube and other platforms appears to be related to recent remarks by the newly appointed Commissioner of the National Tax Service, Lim Gwanghyun, who mentioned an AI-based tax evasion detection system in his inaugural address. On July 15, during his opening remarks at the National Assembly confirmation hearing, Commissioner Lim stated, "We will advance the tax evasion detection system using AI." This means that AI will be used to strengthen existing tax investigations related to tax assessment, collection, and evasion investigations, which are already part of the National Tax Service's duties, and is unrelated to tracking small personal transactions.
However, if an individual deposits or withdraws more than 10 million won in cash in a single day, the transaction may be subject to additional analysis by an algorithm. According to the large cash transaction reporting system, financial institutions must report to the Financial Intelligence Unit (FIU) under the Financial Services Commission if a person conducts cash transactions of 10 million won or more in a single day. If the FIU determines there is an issue, it will notify the National Tax Service, the National Police Agency, and other relevant authorities. Even in such cases, the FIU only reports when a customer deposits or withdraws cash at a financial institution; transfers between accounts are not subject to this reporting requirement.
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