Crypto Dominance in South Korea's Overseas Assets
Cryptocurrencies, exemplified by Bitcoin (BTC), saw a significant downturn, hitting a low of $27,113. The most recent report from South Korea's tax authority unveiled that these digital assets constituted the lion's share of the country's reported assets held abroad.
On September 20, South Korea's National Tax Service (NTS) made an official announcement indicating that 1,432 individuals and corporations had disclosed their offshore accounts involving cryptocurrencies this year. The total disclosed value in cryptocurrencies stood at a whopping 130.8 trillion South Korean won, approximately $98 million, comprising over 70% of the collective disclosed assets held overseas.
Official data disclosed that a total of 5,419 entities disclosed their offshore financial accounts, collectively holding assets valued at 186.4 trillion won ($140 million), encompassing cryptocurrencies, stocks, deposits, and savings.
Though cryptocurrencies dominated the reported assets held abroad in terms of total value, the number of reports showcased that deposits and savings accounts took the lead. A total of 2,952 individuals and companies reported possessing 22.9 trillion won ($17 million) in deposits and savings. Additionally, 1,590 entities reported ownership of stocks valued at 23.4 trillion won ($17.6 million).
The NTS emphasized its intention to rigorously investigate individuals or entities failing to disclose their offshore financial accounts. The authority mentioned its efforts in aggregating cross-border information exchange data, foreign exchange data, and relevant agency notifications. They made clear their intent to impose fines on those breaching the regulations. The regulator conveyed:
In order to respond to the risk of potential tax base erosion through virtual assets, tax authorities around the world, including the National Tax Service, are preparing to exchange information in accordance with the Information Exchange Reporting Regulations.
South Korea, recognized for its positive stance towards cryptocurrencies, has been closely monitoring and evolving its tax policies pertaining to cryptocurrencies in recent years. They have previously seized millions of dollars worth of cryptocurrencies from tax evaders. In August 2023, the South Korean city of Cheongju reiterated its determination to initiate the confiscation of cryptocurrencies from local tax defaulters.
Earlier, reports surfaced that the South Korean government postponed the implementation of a 20% tax on crypto gains from July 2023 to 2025, despite initially planning its enforcement in early 2023.
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