South Koreans Report $99 Billion in Overseas Crypto Assets, Tax Scrutiny Intensifies
South Korean individuals and corporations have reported overseas cryptocurrency assets, including Bitcoin (BTC), amounting to approximately 131 trillion won ($99 billion) for this year, according to the country's National Tax Service (NTS) announcement on Wednesday. This figure represents more than 70% of the total reported overseas assets.
The tax agency disclosed that a total of 5,419 entities reported their overseas financial accounts, holding a total of 186.4 trillion KRW ($140 million) in assets like cryptocurrencies, stocks as well as deposits and savings. Despite the dominance of cryptocurrency holdings in terms of asset value, deposits and savings accounts led in the number of reports, with 2,952 individuals and companies reporting holdings of 22.9 trillion KRW ($17 million). Additionally, 1,590 entities reported holding stocks worth 23.4 trillion KRW ($17.6 million).
The NTS stated that it is planning to heavily scrutinize those who fail to report overseas financial accounts. The authority has been compiling cross-border information exchange data, foreign exchange data, and related agency notification data to respond to the risk of potential tax base erosion through virtual assets.
South Korea's focus on cryptocurrency tax rules has intensified over the years with millions of dollars in crypto confiscated from tax evaders. In August 2023, the South Korean city of Cheongju reiterated its plans to start confiscating cryptocurrency from local tax delinquents. However, the South Korean government reportedly postponed the implementation of a 20% tax on crypto gains from early 2023 to 2025.
In response to concerns about potential misuse of cryptocurrencies for illicit activities such as money laundering, South Korean regulatory authorities have disclosed their intent to place a heightened focus on over-the-counter (OTC) cryptocurrency transactions. During an event at the '2023 3rd Supreme Prosecutors’ Office Criminal Law Academy,' Deputy Chief Prosecutor Ki No-Seong underscored the need for comprehensive regulations governing OTC cryptocurrency transactions. He cited the indictment of three individuals arrested last year for illegally buying 94 billion Won crypto worth $70.9 million via OTC trades as a major example.
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