In an effort to curb tax evasion in the cryptocurrency sector, South Korea is preparing to implement a special asset management system by 2025, as reported by local media outlets.
South Korea Plans Crypto Management System to Fight Tax Evasion
According to a report published today, the National Tax Service of South Korea appointed GTIC as the lead firm responsible for the development of this system.
The move comes as part of a preliminary consultation aimed at supporting the country's efforts to monitor crypto transactions and ensure tax compliance.
The report stated that the system, which is expected to facilitate the analysis and management of data obtained from crypto trading platforms, will play an important role in monitoring users' crypto transactions.
South Korea's initiative to combat tax evasion in the crypto space comes ahead of the planned implementation of a crypto profits tax that will come into force in January 2025.
Originally set for January 1, 2023, the implementation of this tax has been postponed to allow sufficient time for robust regulatory frameworks to be established.
Earlier this year, South Korea's financial watchdog reaffirmed its ban on financial institutions launching cryptocurrency exchange-traded funds (ETFs).
While domestic investors are prohibited from investing in spot crypto ETFs, foreign crypto futures products remain accessible.
Despite these measures, concerns remain about the potential misuse of cryptocurrencies for illegal activities, including tax evasion.
The move to introduce a dedicated asset management system underlines the government's commitment to addressing these concerns and promoting a transparent and harmonious crypto ecosystem.
*This is not investment advice.