South Koreans on Alert: Declare Crypto Holdings or Face Tax Consequences Tax Bombshell Looms: South Korean crypto holders have been given a stern warning by tax accountant Kim Dae-kyung. In an article for Money S, he highlighted the need to declare
overseas crypto exchange holdings to avoid potential trouble.
Domestic Trading Exemption: Currently, profits from crypto trading within South Korea are tax-free. But starting next year, a new law will change that. Traders will have to report gains exceeding $2,100 and pay taxes accordingly.
Overseas Assets Under Scrutiny: Kim emphasized that holdings on foreign platforms already count as
"overseas assets". Neglecting to mention them in tax declarations could be seen as a violation of the law.
Deadline Approaching: Declarations for these assets must be completed by the end of June this year, as per the Income Tax Act's provisions.
Data Exchange Empowers Tax Authorities: The landscape has shifted since 2014, with South Korean tax bodies now sharing information with international counterparts. This means they can access details about an individual's overseas accounts, including those related to crypto.
Fines and Prosecution at Stake: Non-compliance comes with hefty penalties. Fines can reach up to 20% of the wallet balance, while failing to report substantial assets worth over $3.6 million might even lead to criminal prosecution.
Crypto Clauses in Tax Code: Lawmakers have taken note of the crypto boom and made specific amendments to ensure compliance with tax obligations related to "accounts opened overseas to trade cryptoassets."
