South Koreans Warned to Pay Tax on Crypto Held on Foreign Exchanges
South Korea’s National Tax Service (NTS) is on the warpath – and has crypto firmly in its sights.
Fresh from swooping on over 2,400 individuals it said have sought to conceal their earnings by buying cryptoassets like bitcoin (BTC) and ethereum (ETH) – in some cases seizing crypto and freezing wallets – the NTS now said that crypto traders using overseas-based exchanges will also have to report their earnings and pay tax on them from 2022, when new tax laws come into force.
Users of domestic platforms have already been told that their trading incomes will be taxed at a flat rate of 20% if their profits exceed USD 2,300 in the space of the financial year.
But per the broadcaster MBC, the authority is also concerned that citizens will seek to avoid paying tax by bypassing domestic crypto exchanges, which will be obliged to submit data to both the NTS and financial regulators and flag suspicious-looking transfers.
And as such, the tax body stated that the same rules will apply to citizens who use crypto trading platforms based overseas – although it did not explain how it would seek to police these requirements.
The NTS added that all residents who are in possession of USD 441,924 or more worth of assets – including cryptoassets – in overseas-based bank accounts, conventional asset trading platforms or crypto exchanges at any point during a calendar year will be required to declare their earnings and pay tax on them.
The NTS had hoped to begin taxing crypto earnings from autumn this year, but decided to stay its hand after pushback from crypto exchanges who complained they had not been given enough time to put compliance protocols in place ahead of the move.
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