Seoul Introduces Automated Technology to Crack Down on Digital Asset Earnings

Table of Contents South Korea strengthened its tax enforcement drive after recovering $23 million in overseas unpaid taxes. The National Tax Service secured 33.9 billion won from five major evaders since July 2025. Authorities now plan to deploy artificial intelligence and expand global data sharing to tighten crypto taxation. The National Tax Service said it recovered 33.9 billion won from hidden offshore assets. Officials worked with tax authorities in three countries to trace the funds. The agency announced the collections began in July 2025 and targeted five individuals. The NTS stated that it now exchanges financial data with 163 jurisdictions worldwide. It also uses automatic data exchange agreements with 119 countries to identify foreign accounts. Officials said this cooperation helps them locate assets that individuals previously concealed abroad. In one case, a professional athlete left South Korea for an overseas team without paying taxes. The NTS traced the athlete’s foreign assets through international information sharing. The athlete later paid the full tax amount through a local representative. In another case, a foreign business operator departed during an active tax audit. The NTS located the individual’s financial accounts and luxury vehicle in a third country. Authorities then sought assistance from that government to secure the assets. The individual settled outstanding taxes to prevent asset seizure. Separately, the NTS filed a claim in an overseas bankruptcy court in Indonesia. Officials sought unpaid funds from a developer who owed billions of won in taxes. The NTS opened a public bid for a “Virtual Asset Integrated Analysis System.” The project carries a budget of 3 billion won, or about $2.02 million. Officials plan to build the system between April and November 2026. The agency said it will use artificial intelligence and machine learning to review transaction patterns. The system will flag accounts when it detects unusual trading linked to possible tax evasion. Authorities plan to launch a pilot version in November 2026. By 2027, the NTS will receive crypto transaction data automatically from 56 countries. This exchange will operate under a new global reporting framework. Officials said the framework expands cross-border oversight of digital asset holdings. Attorney Sinyoung Choi of Cha & Kwon Law Offices addressed the new system. She said the program will remove the “anonymity” of crypto transactions. She added that the burden of proof rests on taxpayers when authorities question transactions. PPP Floor Leader Song Eon-seok also commented on the policy direction. He argued that taxing crypto while exempting stock gains creates a “double taxation problem.” He referenced the government’s decision to abolish the Financial Investment Income Tax on stocks. Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.