South Korean Crypto Holders Warned to Declare Overseas Holdings or Face Tax Consequences
South Korean crypto holders have been issued a stern warning by tax accountant Kim Dae-kyung regarding the declaration of their overseas crypto exchange holdings. Failure to comply could result in a significant “tax bombshell” for those involved.
Currently, crypto trading profits in South Korea are not taxed if done on domestic platforms. However, a new law set to take effect next year will change this, requiring traders to declare capital gains and pay taxes on profits exceeding approximately $2,100.
Kim Dae-kyung emphasized that cryptoassets held on overseas platforms are already considered “overseas assets” and must be declared on tax declarations for the 2023-2024 financial year. Failure to do so could lead to potential tax law violations.
The consequences of not declaring overseas assets could be severe, with fines ranging from 10-20% of the wallet balance for non-reporting. Additionally, individuals who fail to report wallets containing over $3.6 million worth of assets could face criminal prosecution.
With the National Tax Service now able to access individuals’ overseas account information and increased data sharing between international exchanges, the risk of non-compliance is higher than ever.
President Yoon Suk-yeol has proposed raising the tax threshold for domestic crypto trading profits to around $41,000, but until then, South Korean crypto holders are urged to heed the warning and ensure they comply with the new regulations to avoid any potential tax repercussions.
