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 overseas investors using 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 requiring submission of an identity verification form to check customers' overseas tax obligations starting Jan. 1 next year. 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 detailed implementation rules 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 during next year to aggregate 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 Koreans who use overseas exchanges. An official at the Ministry of Economy and Finance (MOEF) said, "We plan to share from 2027 the information collected in 2026."
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 inadequate taxation infrastructure and investor backlash, the implementation date was pushed back three times, from 2023 to 2025 and then to 2027.
An official at the Ministry of Economy and Finance (MOEF) said, "The core purpose of joining CARF is to share cross-border coin transaction information to prevent tax avoidance," adding, "It is in fact difficult to say it has nothing to do with coin taxation."
There is another reason Upbit quickly followed CARF implementation rules. The Korea Financial Intelligence Unit (FIU) imposed a 35.2 billion won penalty surcharge on Dunamu, Upbit's operator, in Nov., 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 abuses, but Dunamu was caught by the FIU after performing lax customer verification, such as accepting IDs that were out of focus or had certain information obscured. A financial industry official said, "If exchanges strengthen identity verification procedures in line with CARF implementation rules, they will reduce risks arising from lax verification."
Regarding this, an Upbit official said, "CARF implementation is an obligation for all domestic digital asset exchanges," adding, "Domestic exchanges must receive CARF identity verification forms starting Jan. 2026."