The South Korean tax authorities will strengthen watch on foreign exchange transactions to crack down on tax evasions of social media influencers like YouTube video creators.
The National Tax Service (NTS) plans to begin discussion with the Ministry of Economy and Finance to lower the threshold at which the Bank of Korea can collect U.S. dollar-denominated income source data from the current $10,000 per year.
Under the current law, the central bank is required to collect data on sources of income if a Korean national receives more than $10,000 from overseas to allow the NTS to use the information on taxation and tax audit.
The finance ministry once slashed the criteria to $1,000 per year in 2019 when tax evasion issues of YouTubers caused a big stir, but the move had applied to transactions from January to December in 2019.
The NTS compared foreign currency transaction data in 2019 with that in 2020 and found that the lowered threshold had worked on preventing tax evasion, according to sources. Based on the review, the tax authority has come to conclusion to strengthen taxation on foreign currency transactions, an NTS official said.
An official from the finance ministry said it would examine the foreign exchange transaction act to determine whether it is necessary to strengthen the criteria to stabilize the foreign exchange market if the NTS asks for consultation.
Content creators and influencers on YouTube can make profits from advertisement if they have more than 1,000 subscribers and 4,000 hours of viewed content in the last 12 months. The revenues are sent from Google’s Singaporean subsidiary.
By Kim Jung-hwan and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]