The Korean National Tax Service has launched the construction of a virtual asset transaction tracking system to pave the way for taxation in 2027

The National Tax Service of Korea (NTS) announced on Thursday that it has begun constructing a tracking system for cryptocurrency investment gains, aimed at supporting the government's expansionary fiscal policy and the need to increase fiscal revenue.

The system's construction comes just before the government's plan to tax profits from virtual assets starting in January next year. According to the announcement, the NTS has tendered for the "Comprehensive System for Virtual Asset Transaction Analysis," a project published on the electronic bidding platform by the Public Procurement Service, responsible for government and public institution procurement, with a budget of 3 billion won (approximately 202,000 USD). According to the plan, the winning bidder will be selected and contracted within this month, with system design starting in April, followed by multiple rounds of testing before entering a trial operation phase in November, and is expected to officially launch within the year.

The NTS stated that the system will start collecting individual virtual asset transaction data from 2027, systematically managing and analyzing vast amounts of transaction information to more effectively detect tax evasion, including identifying hidden income of tax delinquents 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, relevant virtual asset analysis data and lists of suspects will be shared with other government departments such as the Korea Customs Service, the Statistics Korea, and the Bank of Korea.

According to Korean tax law, starting in January next year, the portion of annual income from virtual assets exceeding 2.5 million won will be subject to a comprehensive tax rate of 22% (including 20% income tax and 2% local income tax).