key takeaways:
- South Korean taxpayers report $98.5 billion in overseas cryptocurrency assets.
- 1,432 individuals and companies comply with reporting requirements.
- Crypto holdings make up 70.2% of the total reported foreign holdings value.
South Korea’s National Tax Service (NTS) has revealed that this year, taxpayers declared a total of 130.8 trillion South Korean won (approximately $98.5 billion) in overseas cryptocurrency assets following the country’s newly implemented requirement for reporting such assets.
The NTS made an official announcement on September 20, disclosing that 1,432 individuals and corporations complied with the reporting mandate for overseas cryptocurrency accounts.
Out of the overall reported amount, cryptocurrency holdings accounted for 70%, equivalent to approximately $98 million, of the total reported figure of 186.4 trillion won (about $140 million). This comprehensive figure encompassed assets in local and foreign stocks, cryptocurrency holdings, and cash savings.
Within the reported figures, digital assets constituted 70%, totaling around $98 million, with 1,432 entities and individuals holding digital assets among the total number of reportees.
The report also highlighted that savings amounted to a substantial 22.3 trillion won (approximately $17 million) from 2,952 individuals and businesses. Additionally, 1,590 companies with stocks reported holdings of 22.3 trillion won, equivalent to approximately $17.6 million.
Regarding the geographical location of overseas accounts held by South Korean entities, the United States emerged as the leading destination, followed by Japan and Britain. For individual taxpayers, the United States topped the list, with Singapore and Hong Kong following suit.
However, it’s worth noting that the breakdown by destination excludes cryptocurrency assets due to the challenges associated with accurately tracking their geographical location on exchange platforms.
Earlier this year, the tax regulatory authority in South Korea unveiled a plan to enhance its scrutiny of individuals who do not report their foreign assets. South Korean law requires citizens and residents to report overseas assets valued at 500 million won or more.Ā
The National Tax Service, along with tax authorities worldwide, is gearing up to exchange information in accordance with Information Exchange Reporting Regulations to address the potential risk of tax base erosion through virtual assets.
South Korea, known for its cryptocurrency-friendly stance, has been notably focused on cryptocurrency tax regulations in recent years and has seized millions of dollars in cryptocurrency from tax evaders. In August 2023, the South Korean city of Cheongju reaffirmed its intentions to begin confiscating cryptocurrency from local tax delinquents.
