As published on pulsenews.co.kr, Friday 4 June, 2021.
South Korean citizens and companies holding accounts for offshore digital coins are subject to a compulsory reporting duty to tax authorities from next year.
Under the current system in Korea, residents or corporate entities with a total of 500 million won ($448,000) or more in overseas financial accounts as of the end of any month in the year are obliged to report to tax authorities by June of the following year.
The financial accounts subject to this duty include all those for savings, stocks, bonds, funds, derivatives, and insurance products, and crypto exchange accounts will be added from next year, National Tax Service said on Thursday. The first-year reporting for the ownership of overseas crypto exchange accounts will start in June 2023.
Those with less than 500 million won in overseas financial accounts are free from reporting obligations, but taxes should be paid on any earned income from transactions, an NTS official said.
Individual investors who buy and sell overseas stocks through domestic securities accounts are not subject to reporting requirements.
Those with reporting obligations for this year are required to complete reporting by June 30 through local tax authorities or online (www.hometax.go.kr).
Violations are subject to a fine of up to 20 percent of the entire unreported or underreported funds. If those funds exceed 5 billion won, the violator may face criminal punishment.
Last year, a total of 2,685 persons reported their funds in overseas financial accounts, which amounted to 59.9 trillion won.