South Korea’s National Tax Service announced yesterday that Korean residents with accounts in foreign crypto exchanges may have to report their holdings for tax purposes starting 2022.
Fast facts:
- A Korean citizen will be required to pay taxes if the aggregate amount of their account balances in overseas virtual asset businesses exceeds 500 million won, or US$447,900, at the end of each month.
- The new tax rule for overseas virtual assets will be applied to crypto holdings starting Jan. 1, 2022, and the tax reporting will be required starting June 2023.
- Those in violation of their crypto tax obligation will be subject to a fine of 10-20% of the amount not reported or underreported. If the underreported amount exceeds 5 billion won, or US$4.47 million, the tax dodger could be subject to criminal punishment.