South Korean Citizens Should Report Large Offshore Crypto Accounts Next Year

South Korea's National Tax Agency announced that from 2022, some citizens and businesses in the province will be required to declare their holdings on foreign cryptocurrency exchanges for tax purposes, Forkast reported today. According to the publication, the agency announced that the new rules will affect Koreans who have at least 500 million Korean won (approximately $450,000) worth of cryptocurrencies in their foreign accounts at the end of each month. In the past, such requirements have included not only foreign bank deposits, but also savings, stocks, bonds, funds, derivatives and insurance products. However, from January 1, 2022, these reporting rules will be expanded to include cryptocurrencies. Therefore, Koreans will have to declare their corresponding offshore digital asset holdings for the first time in June 2023. Koreans who fail to report their crypto caches will be fined up to 20% of their undisclosed or underreported digital assets. At the same time, if their undeclared crypto assets are worth more than 5 billion won ($4.5 million), their holders may face criminal charges. South Korean crypto tax gains momentum Meanwhile, South Korean authorities are also preparing to impose an income tax on crypto trading. Under the new rules, which were recently delayed to 2022, crypto trading earnings will be subject to a 20% tax if they exceed 2.5 million won (approximately $2,000) in a year. Interestingly, a survey found that around 54% of South Koreans are actually in favor of the upcoming crypto capital gains tax. The Korea Financial Services Commission (FSC) also recently ordered its officials involved in crypto-related policymaking to report their own crypto investments. The rule includes both FSC employees responsible for developing cryptocurrency policies and those tasked with monitoring and analyzing suspicious crypto transactions.

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