Korea's National Tax Service launches virtual asset transaction tracking system development to pave the way for taxation in 2027

ChainCatcher News, South Korea’s National Tax Service (NTS) announced on Thursday that it has begun developing a tracking system for cryptocurrency investment profits. This move aims to support the government’s expansionary fiscal policies and increase revenue.

The system development comes just before the government plans to start taxing virtual asset profits from January next year. According to the announcement, the NTS has issued a tender for the “Virtual Asset Transaction Analysis Integrated System” project. The procurement was posted on its electronic bidding platform by the Procurement Office, responsible for government and public institution procurement, with a budget of 3 billion won (approximately $202 million). The winning bidder is expected to be selected and contracted within this month. System design will begin in April, followed by multiple testing phases, with a trial run starting in November, and full deployment expected within the year.

The NTS stated that starting in 2027, the system will collect individual virtual asset transaction data. By systematically managing and analyzing large volumes of transaction information, it aims to more effectively detect tax evasion, including identifying hidden income through tax audits.

Notably, the NTS plans to incorporate artificial intelligence and machine learning technologies to analyze and track abnormal transaction types and patterns. Additionally, virtual asset analysis data and lists of suspects will be shared with other government agencies such as the Korea Customs Service, Statistics Korea, and the Bank of Korea.

According to Korean tax law, from January next year, virtual asset profits exceeding 2.5 million won annually will be subject to a combined tax rate of 22% (including 20% income tax and 2% local income tax).