South Korean Citizens Advised to Report Cryptocurrency Assets Held Abroad
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Kim Dae-kyung, a tax accountant with Hana Bank Asset Management, advises South Korean crypto investors to disclose any crypto exchange accounts held abroad to avoid an unexpected tax charge, as detailed in a report by Money S.
Declaration Required for South Korean Crypto Investors
Currently, profits from crypto trading in South Korea are not taxable if the activities occur on local platforms. However, taxes on capital gains from crypto trading that exceed approximately $2,100 will be levied starting next year. Kim highlights that crypto assets on foreign exchanges are already viewed as “overseas assets” and need to be reported in the 2023-2024 tax filings to avoid violating tax laws.
South Koreans must declare these accounts by the end of June this year according to the Income Tax Act. The act requires reporting of overseas financial accounts if the total balance exceeds $363,000.
Severe Penalties for Non-Declaration
Kim warns that hefty fines, up to 10-20% of the account balance, can be levied for non-reporting of these assets. Additionally, failing to disclose wallets with over $3.6 million in assets could lead to criminal charges.
The tax code now includes provisions specifically for “accounts opened overseas to trade cryptoassets,” added in December 2020.
https://t.co/0ODFiUuW3F delays Korean market entry indefinitelyhttps://t.co/0wH9g3SCmZ
— The Korea Times (@koreatimescokr) April 24, 2024
President Yoon Suk-yeol has indicated plans to increase the domestic crypto trading tax exemption to roughly $41,000.
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