National Tax Service to Adopt Personal Wallet Tracking Tech Ahead of 2027 Virtual Asset Taxation
The National Tax Service is moving to track personal wallets. Ahead of the implementation of virtual asset taxation in 2027, the agency is introducing commercial blockchain tracking software capable of tracing transaction histories for assets held in personal wallets, which have previously been difficult to manage. The initiative aims to detect untaxed transactions using technology similar to that utilized by law enforcement agencies like the police and prosecutors, making it clear that moving funds to personal wallets does not exempt them from taxation.
The NTS’s preparations are underway on multiple fronts. The tax authority announced that it has completed the development of a tax source management system and established an integrated analysis system for virtual asset taxation. Additionally, it is preparing implementation guidelines for records required to calculate taxable income with five exchanges, including Dunamu (operator of Upbit), Bithumb, Coinone, Korbit, and Gopax.
The agency plans to secure information on overseas exchanges by partially utilizing the OECD’s Crypto-Asset Reporting Framework (CARF). CARF is a system for the automatic exchange of information on virtual asset transactions subject to reporting between tax authorities of participating countries. However, the timing of the initial information exchange for some countries falls later than Korea's implementation of taxation.
Data from the office of Rep. Kim Sang-hoon cited the United Arab Emirates (UAE), where many virtual asset companies operate, as a case study. The UAE applies CARF starting from the 2027 fiscal year, with the first information exchange taking place in 2028. The Ministry of Economy and Finance explained that this schedule does not necessarily create a one-year information gap, as the information exchanged in 2028 covers transactions conducted during 2027. The NTS also informed Rep. Kim’s office that the UAE’s first information exchange in 2028 would cover virtual asset transactions made in 2027.
The taxation of virtual assets has been postponed three times. Established through amendments to the Income Tax Law, the measure was initially scheduled for implementation in 2022 but was pushed back to 2023 and 2025 before being finalized for 2027. The government maintained the implementation schedule while finalizing the tax revision plan in August, leaving only the parliamentary review process remaining.
