National Tax Service Introduces Tracking Program to Block Tax Gaps for Personal Wallets
The National Tax Service (NTS) plans to introduce a tracking program used by investigative agencies to prevent tax gaps related to virtual assets stored in personal wallets. According to materials from Kim Sang-hoon, a member of the National Assembly from the People Power Party, the NTS announced that it would implement a commercial program to track the movement of digital asset wallets between domestic and foreign investigative agencies. This measure is proposed as a solution to the difficulty of knowing the scale of asset holdings or income in personal wallets without voluntary reporting. While the NTS acknowledges the practical limitations in comprehensively identifying unreported transaction information for personal wallet transactions, it explained that the introduction of the program aims to prevent tax gaps. The government has stated that digital assets stored in personal wallets are subject to taxation if income is generated. Additionally, regarding overseas exchanges, the NTS plans to implement the Crypto Asset Automatic Information Exchange Framework (CARF) to prevent tax gaps. Concerns have been raised that if the CARF implementation is delayed beyond 2027, tax gaps may occur. For example, Binance is operating in the UAE, which plans to implement CARF in 2028. The NTS has stated that it plans to exchange information related to digital asset income tax in line with the CARF implementation schedule.
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