[News Space=Reporter seungwon lee] The government has completed the National Tax Service's domestic and international coin transaction surveillance network by forcing virtual asset exchanges to adopt CARF (Automated Representation of Cryptocurrency Information Retrieval System).

Beginning January 1, 2026, the five major domestic exchanges, including Dunamu (Upbit), Bithumb, and Coinone, will be required to collect "Overseas Tax Liability Verification Forms" from customers. Those residing overseas or subject to taxation will be required to submit supporting documentation, including a Tax Identification Number (TIN). This is part of the OECD-led CARF system, with 48 participating countries (including Korea). Transaction information will be collected in 2026, with automatic cross-border sharing beginning in 2027, aimed at curbing tax evasion.

CARF Infrastructure Operation: 100% of Domestic and International Transactions Are Under the National Tax Service's Surveillance Network

Domestic exchanges report transaction data for non-residents (foreigners) to the National Tax Service (NTS), while the NTS receives data on domestic residents from overseas exchanges (such as Binance). For example, Upbit will require new members to submit a verification form immediately starting January 1, 2026. Existing members will be granted a grace period until the end of 2026, but submission of documentation is mandatory for overseas tax obligations.

The Financial Intelligence Unit (FIU) has imposed a fine of 2.73 billion won on Korbit for violating customer identification (CID) regulations, making it imperative for exchanges to strengthen compliance. Industry estimates suggest domestic and international trading volumes reach 160 trillion won, which is expected to have a significant tax revenue impact.

2027 Tax Roadmap: 22% tax rate for income exceeding 2.5 million won

Income from the transfer or rental of virtual assets will be classified as miscellaneous income starting January 1, 2027. Any amount exceeding KRW 2.5 million per year will be subject to a 20% miscellaneous income tax (total of 22%, including a 2% local tax) without withholding. For example, if a KRW 10 million acquisition is made and KRW 20 million is transferred, the KRW 7.5 million (KRW 10 million profit - KRW 2.5 million deduction) will be subject to a 22% tax rate, resulting in a tax of KRW 1.65 million.

The acquisition price is calculated based on the daily average Korean Won exchange rate of four exchanges, including Dunamu and Bithumb. Starting in 2028, exchanges will be required to submit tax information. The National Tax Service has already published a guide on "Transfer Taxation After January 1, 2027" on its website. 

Will history repeat itself? Market anxiety persists amid concerns about a fourth wave despite a third grace period

Since its introduction in 2020, virtual asset taxation has been postponed three times, from 2023 to 2025 and then to 2027. This delay was primarily due to inadequate infrastructure and investor opposition. The December 2024 amendment to the Income Tax Act set the date for 2027, but Kim Gap-rae, a research fellow at the Capital Market Research Institute, warned that a fourth postponement would "lead to a loss of policy confidence." The Ministry of Finance and Economy (formerly the Ministry of Strategy and Finance) plans to decide on a postponement in the July 2026 tax law revision, raising market concerns about an increased tax burden amidst the Bitcoin slump.

Experts argue against Korea's additional deferral, citing the US and Japan's prior taxation, but the market is keeping a close eye on the discussions between the Ministry of Strategy and Finance and the National Assembly in July.