South Korean tax payers have declared some 131 trillion won (more than $98 billion) of crypto holdings in overseas accounts this year. The amount was announced by the country’s tax agency and it comes after the authorities in Seoul imposed a mandatory reporting requirement for financial assets held abroad.
Almost 1,500 South Korean Firms and Individuals Declare Foreign Crypto Accounts
South Koreans have reported a total of 186.4 trillion won’s worth of overseas assets in 2023, a new record compared to last year’s 64 trillion won, as a result of a newly introduced regulation, the National Tax Service (NTS) unveiled, quoted by the Yonhap news agency.
The combined amount includes 131 trillion won ($98.4 billion) in cryptocurrencies, the agency noted, adding that the number of companies and private individuals who reported their crypto assets in overseas accounts has reached 1,432.
The United States was the leading destination for overseas accounts held by South Korean businesses, followed by Japan and Britain, while for individuals, Singapore and Hong Kong ranked second and third respectively, again after the U.S.
The tax authority remarked, however, that the breakdown by country does not include cryptocurrency holdings as it’s much more difficult to track the geographical location of digital assets held on crypto trading platforms.
Under the country’s current tax legislation, South Korean nationals and legal entities who have more than 500 million won (approx. $377,000) in foreign financial accounts, regardless of the type of assets, are obliged to report them to the authorities in their country in June. Those who fail to do so will face a fine of up to 20% of the undeclared amount.
While postponing a 20% tax on crypto-related capital gains until 2025, the government in Seoul has nevertheless been trying to increase its budget receipts from its citizens’ crypto in the meantime. Last fall, officials announced that in two years they had seized crypto assets worth almost 260 billion won ($184 million at the time) due to tax arrears.
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