The Korean National Tax Service (NTS) clarified that taxpayers holding virtual assets through non-custodial, decentralised wallets, including cold wallets (offline wallets) and wallets such as MetaMask, will not be subject to overseas financial account declarations.

This exemption comes after the inclusion of virtual assets in such declarations in June 2023, mandating users with over 500 million won in virtual assets to report to the National Tax Service.

Crypto in Korea

Cryptocurrencies play a significant role in the composition of overseas assets for both individuals and corporations in South Korea.

According to the NTS in September 2023, 1,432 entities reported overseas cryptocurrency accounts, amounting to approximately 130.8 trillion South Korean won or $98 million.

Despite cryptocurrencies holding the highest total value of reported assets, deposit and savings accounts led in the number of declarations, totaling 22.9 trillion won ($17 million).

To ensure compliance with regulations, the tax regulator is actively compiling cross-border information exchange data, foreign exchange data, and related agency notification data.

In a related development, South Korea has decided to postpone the proposed 20% tax on crypto profits, initially set for 2023, to the year 2025.