New Information-Sharing Framework for Cryptocurrency in South Korea
In an effort to enhance oversight of cryptocurrency transactions, the South Korean government is set to initiate a new information-sharing framework starting next year. This initiative aligns with the Common Reporting Standard for Crypto-Asset Financial Account Information (CARF).
Requirements for Domestic Cryptocurrency Exchanges
Domestic cryptocurrency exchanges will be required to disclose trade information regarding non-resident investors, while the National Tax Service (NTS) will also receive reports on domestic investors’ activities on foreign platforms.
Global Tax Authority Collaboration
The framework allows tax authorities globally to obtain details of their residents’ overseas transactions via the OECD system. Although the formal implementation of this sharing protocol won’t commence until 2027, the data collected beginning next year will fall under the umbrella of this reporting requirement.
Voluntary Declarations for Overseas Financial Accounts
Moreover, the NTS has clarified that South Korean residents must voluntarily declare any overseas financial accounts—be they tied to stocks, deposits, or cryptocurrencies—if their total exceeds 500 million Korean won. In the current year, declarations for overseas cryptocurrency holdings have surged to an impressive 11.1 trillion Korean won.
Implications of CARF Guidelines
Notably, under the CARF guidelines, all records of overseas cryptocurrency trades will be shared with tax authorities, irrespective of the transaction size.
Official Statements
A spokesperson from the Ministry of Finance emphasized that this new arrangement is based on international cooperation and will not influence existing domestic tax policies linked to cryptocurrency assets, with any potential taxation rules remaining indefinitely postponed until the official rollout in 2027.
