South Korea Develops System to Track Cryptocurrency Investment Gains

South Korea's National Tax Service (NTS) announced on March 12 that it is developing a system to track cryptocurrency investment gains. According to BlockBeats, this initiative aligns with the government's expansive fiscal policy and the need to increase revenue. The system is being constructed ahead of the government's plan to tax virtual asset profits starting January next year. The NTS has issued a tender for the 'Virtual Asset Transaction Analysis Integrated System' project, with the procurement office responsible for government and public institution purchases posting it on its electronic bidding platform. The project is valued at 3 billion Korean won (approximately $2.02 million). The selected bidder will be chosen and contracted within this month, with system design commencing in April. After multiple rounds of testing, the system is expected to enter trial operation in November and officially launch within the year. The NTS stated that the system will begin collecting individual virtual asset transaction data from 2027, aiming to systematically manage and analyze vast amounts of transaction information to more effectively identify tax evasion, including uncovering hidden income 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, including the Korea Customs Service, Statistics Korea, and the Bank of Korea. Under South Korean tax law, starting January next year, virtual asset annual earnings exceeding 2.5 million Korean won will be subject to a 22% comprehensive tax rate, which includes a 20% income tax and a 2% local income tax.