Several South Korean doctors have been found guilty of evading taxes on income earned from medical practices abroad, prompting an investigation by tax authorities. The National Tax Service on July 2 said it had identified 41 suspects involved in offshore tax evasion, who concealed overseas income or changed their nationality to avoid tax payments, and has launched a tax audit.
According to South Korea’s tax authorities, one of the suspects, a plastic surgeon referred to as A, earned tens of billions of won from treating patients at hospitals in Southeast Asia between 2022 and 2023. The surgeon disguised the practice as “local hospital seminars” to conceal his activities, collecting fees through a borrowed-name account using cryptocurrency, and leaving no official sales records.
The process of converting cryptocurrency to cash was meticulous: the virtual currency in the borrowed-name account was sold on a domestic coin exchange, with the proceeds withdrawn in cash from ATMs hundreds of times. According to the National Tax Service, about four to five doctors, primarily plastic surgeons and dermatologists, evaded taxes through similar overseas medical practices like A.
Some tax evaders went so far as to obtain foreign citizenship to evade taxes. Certain countries offer citizenship to foreigners who invest above a certain amount, under the “golden visa” system. Suspect B utilized a golden visa to change nationality and avoid detection of hundreds of billions of won in foreign income. B then re-entered Korea as a “Korean with foreign citizenship,” a term used to describe individuals with foreign nationality exploiting loopholes in residency laws, and used hidden overseas funds to purchase a luxury mansion.
Jeong Jae-soo, Director of the National Tax Service’s Investigation Bureau, said, “This is a loss of resources that should be used to overcome the economic crisis,” and added, “Offshore tax evasion techniques are becoming increasingly sophisticated and advanced.”
