South Koreans Are Required to Pay Taxes for Crypto Holdings in Overseas Exchanges, Authorities Warn
South Korean tax authorities are unstoppable in keeping crypto holders in their eyes and making them accountable to pay taxes. The National Tax Service (NTS) has issued a warning to the crypto traders that they have to report their earnings even from tokens held in foreign exchanges.
No Details on How the Agency Will Supervise the Process
According to MBC, the agency alerted that South Koreans who are using overseas exchanges are also responsible for reporting all their profits gained. By doing so, crypto holders should pay correspondent taxes on them from 2022.
That year is where the government seeks to deploy the new tax laws on cryptocurrencies. As Bitcoin.com’s newsdesk recently reported, the South Korean central government is expected to introduce a 20% on crypto trading profits from domestic crypto exchanges, only if gains cross the $2,300 threshold.
The NTS is concerned about crypto traders using foreign crypto exchanges to bypass their tax obligations in South Korea.
Still, it didn’t provide details on how it would oversee the process to make people compliant with the tax rule on declaring profits from abroad crypto exchanges.
Domestic crypto exchanges are required with the new legal framework to submit data from traders to both the financial watchdog and the tax authority. However, there are no legal ways to force foreign crypto exchanges to do it so.
The NTS clarified that the same tax rules apply to transactions made with these crypto exchanges without in-depth details.
Traders Should Pay Taxes on Cryptos Held Abroad if They Are Worth $442K or Above
Moreover, the tax authority reminded that those who hold 500 million won ($442,700) or more in assets, including cryptos on foreign financial institutions such as banks or fiat trading platforms, should report them in the fillings.
Earlier this week, Bitcoin.com News also reported that the NTS identified 2,416 individuals who reportedly hid their assets in cryptos to avoid taxation.
What do you think about the warning issued by the National Tax Service? Let us know in the comments section below.