Starting next year, the National Tax Service will be able to look into the transaction information of domestic investors who buy and sell bitcoin and other assets on overseas virtual asset (coin) exchanges. The transaction information of foreign investors on domestic virtual asset exchanges will also be shared with the National Tax Service. In the industry, there is an assessment that "the government is beginning in earnest to build infrastructure to tax revenue from coin transactions."
According to the virtual asset industry on the 25th, Upbit will introduce a procedure starting Jan. 1 to submit an identity verification form that confirms customers' information related to overseas tax obligations. Customers who have tax obligations overseas, such as those conducting virtual asset transactions on overseas exchanges, must submit their tax obligation information and supporting documents to Upbit.
This measure follows the Ministry of Economy and Finance's administrative notice in September of a detailed implementation rule for the Crypto-Asset Reporting Framework (CARF). Forty-eight countries, including the United Kingdom, Germany, and Japan, automatically exchange virtual asset transaction information every year through CARF. The Korean government also officially signed the Multilateral Competent Authority Agreement (MCAA) for CARF implementation at the Organisation for Economic Co-operation and Development (OECD) Global Forum in Nov. last year.
Under the ministry's administrative notice, domestic virtual asset exchanges must build a system next year to compile the transaction information of foreigners (nonresidents) who buy and sell virtual assets on domestic exchanges. When the National Tax Service uploads this information to the OECD system, the National Tax Service can receive the transaction information of Korean nationals who use overseas exchanges. A Ministry of Economy and Finance (MOEF) official said, "We plan to share information collected in 2026 starting in 2027."
In the industry, people say the government has begun in earnest to prepare for coin taxation. The system related to virtual asset taxation was first legislated in 2020. However, due to reasons such as insufficient taxation infrastructure and investor backlash, the implementation date was pushed back three times, from 2023 to 2025 and then to 2027.
An MOEF official said, "The core purpose of joining CARF is to share cross-border coin transaction information to prevent tax avoidance," adding, "It is hard to say it has no connection to coin taxation."
There is another reason Upbit quickly followed the CARF implementation rules. In Nov., the Financial Intelligence Unit (FIU) imposed a 35.2 billion won penalty surcharge on Dunamu, which operates Upbit, and one of the reasons was a violation of customer due diligence obligations.
Domestic exchanges must accurately identify investors to prevent money laundering and other crimes, but Dunamu conducted lax customer verification using IDs that were out of focus or had some information obscured, and was caught by the FIU. A financial industry official said, "If exchanges strengthen identity verification procedures under the CARF implementation rules, they will reduce risks arising from insufficient verification."