South Korea plans wallet tracing tools to enforce 2027 crypto tax

South Korea’s National Tax Service has said it will introduce commercial crypto tracing software used by domestic and overseas investigative agencies as it prepares to tax income generated through private wallets from 2027. Summary South Korea’s National Tax Service plans to use commercial tracing software to track digital asset movements between private wallets ahead of the 2027 crypto tax rollout. The tax agency acknowledged that identifying all unreported private wallet transactions remains difficult because taxpayers directly control the assets. Crypto income generated through private wallets and overseas exchanges will be taxable, with qualifying gains subject to a combined 22% tax. South Korea plans to use CARF data for overseas transactions, with information exchanged in 2028 expected to cover crypto activity conducted during 2027. Taxable crypto income generated from January 2027 will first be reported in May 2028 under South Korea’s filing timetable. Digital Asset reported on Aug. 31, citing responses provided by the NTS to People Power Party lawmaker Kim Sang-hoon, that the agency plans to use software capable of tracing and analyzing digital asset movements between walle...