Korean NTS Initiates Virtual Asset Transaction Tracking System Construction, Paving the Way for Taxation in 2027

South Korea’s National Tax Service (NTS) announced Thursday it is launching a tracking system for cryptocurrency investment returns, aiming to support the government’s expansionary fiscal policy and boost revenue ahead of a planned virtual asset tax set to take effect in January next year. The agency has tendered the “Integrated Virtual Asset Transaction Analysis System” on the Public Procurement Service’s (PPS) e-procurement platform, with a budget of 3 billion Korean won (roughly $2.02 million). The winning bidder will be selected and contracted this month, with system design kicking off in April, multiple rounds of testing, a trial run in November, and full launch expected by year-end. Starting in 2027, the system will collect individual virtual asset transaction data to curb tax evasion—using systematic management and analysis of large-scale transaction information, including identifying hidden income via audits. Notably, the NTS will integrate AI and machine learning to spot abnormal transaction types and patterns. It will also share relevant analysis data and suspect lists with agencies like the Korea Customs Service, Statistics Korea, and the Bank of Korea. Under South Korean tax law, starting January next year, virtual asset annual income exceeding 2.5 million Korean won will be taxed at a 22% combined rate (20% income tax plus 2% local income tax).