South Koreans Will Be Forced To Disclose Large Offshore Crypto Accounts
In January 2022, the South Korean National Tax Service will force citizens to claim large offshore cryptocurrency savings. This will happen as part of the expansion of the rules for reporting the ownership of foreign assets.
The rules will apply to those South Koreans who hold over 500 million won of digital currency in their accounts at the end of each month, the equivalent of $450,000. Previously, a similar requirement was applied to those who made a deposit with foreign banks, owned stocks, funds, derivatives, bonds, or insurance products.
According to the plans of the tax department of South Korea, the first reporting of citizens on offshore crypto assets should arrive in June 2023. Those of them who prefer to remain silent about their condition will inevitably face a fine of 10% to 20% of the amount of hidden or deliberately lowered crypto assets. In the event that the value of the assets exceeds 5 billion won (about $4.5 million), criminal proceedings may be opened against the holder.
Regulatory measures are being tightened to combat money laundering and cryptocurrency fraud. Particularly affected were local companies representatives of the crypto industry, which were forced to register with regulators as virtual asset service providers before September this year. But, since the department did not set clear requirements, and Korean banks are not eager to cooperate with crypto companies, many of them are not sure that they will be able to pass the audit with the financial control authorities.
Recall that from January 1, 2022, the South Korean authorities will introduce an income tax on digital currency trading, obliging citizens to pay 20% of their profit from trading crypto assets during the year is 2.5 million won ($2,000) or more. At the same time, according to a national survey, 54% of citizens were in favor of introducing taxes on cryptocurrency trading.