Residents of South Korea will be obliged to pay tax on crypto assets held in overseas exchanges starting next year.
- Tax will be required when total balances held with foreign virtual-asset businesses exceed 500 million won (US$450,000) at the end of each month, Forkast reported Friday, citing an announcement by the country's National Tax Service.
- The new rule applies from Jan. 1, 2022, with tax reporting required from June 2023.
- Violation will be met with fines of 10%-20% of the amount not reported or underreported. Criminal punishment is possible for amounts exceeding 5 billion won ($4.5 million).
- Finance Minister Hong Nam-Ki said in April that taxation of gains from crypto trading is inevitable.
- South Korea is taking a sterner approach to regulation of cryptocurrency in an attempt to crack down on money laundering and fraud. Crypto businesses in Korea have until September to register as virtual asset service providers with the country's financial regulator so that the legality of their business operations can be monitored.