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South Korean Crypto Holders Warned About Overseas Holdings
South Korean crypto holders have been cautioned to declare their overseas crypto exchange holdings to avoid potential tax implications.
Changes in Taxation Laws
Currently, crypto trading profits in South Korea are not taxed if conducted on domestic platforms. However, a new law set to be enforced next year will require traders to report capital gains and pay taxes on profits exceeding approximately $2,100.
Declaration of Overseas Assets
According to Kim Dae-kyung, a tax accountant at Hana Bank Asset Management group, cryptoassets held on platforms outside South Korea are considered “overseas assets.” Failure to declare these assets in tax declarations could lead to legal consequences.
Deadline for Declarations
Kim emphasized that declarations for overseas financial accounts must be completed by the end of June this year to comply with the Income Tax Act.
Consequences of Non-Compliance
Failure to report overseas assets could result in fines or even criminal prosecution. The National Tax Service now has access to individuals’ overseas account information, making it crucial for traders to comply with the regulations.
Recent Legislative Changes
In December 2020, specific clauses related to cryptoassets were added to the tax code, addressing accounts opened overseas for crypto trading.
President Yoon Suk-yeol has proposed raising the tax threshold for domestic crypto trading profits to approximately $41,000.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
