The National Tax Service is looking for a platform to let them look at crypto trading data and find possible tax evasion.
The South Korean government is getting ready to use artificial intelligence to keep track of bitcoin investment gains as it gets closer to putting a long-delayed tax on digital assets into effect.
The Korea Times said on Thursday that South Korea’s tax office has put out a bid to construct an AI-based system to look at cryptocurrency transaction data. This is part of the government’s plans for a tax on digital asset gains in 2027.
The initiative, which costs roughly 3 billion Korean won (about $2 million), will create an all-in-one platform that can handle a lot of crypto trade data. The Korea Times says that the NTS wants to employ AI and machine learning to find strange types of transactions and trends that could mean people are trying to avoid paying taxes.
Reports say that South Korea will start taxing cryptocurrency investment gains in January 2027, with a 22% tax on revenues over 2.5 million won ($1,700).
NTS plans system to analyze crypto transaction data
The Korea Times says that the tax office wants to choose a contractor by March. The tax office plans to begin system design in April and conduct testing at various intervals throughout the year. The technology is slated to become live between November and December, and a test program is planned for November.
The NTS claimed that the platform will allow authorities keep track of and analyse enormous amounts of data about virtual asset transactions in a methodical way.
The technology should help with tax audits, find hidden revenue from people who don’t pay their taxes, and find possible tax evasion related to crypto trading.
The tax agency said it would send other authorities, such the Bank of Korea and the Korea Customs Service, lists of people it thinks are breaking the law and analysis data.
South Korea prepares for 2027 crypto tax launch
Despite its adoption a few years ago, South Korea’s crypto tax system has faced numerous delays.
In 2024, lawmakers discussed whether to implement the proposed crypto gains tax in 2025 or delay it further due to industry opposition and political disagreements over tax thresholds. The lawmakers have postponed the law three times since its passage in 2020.
The policy would add a 20% income tax and a 2% local tax on bitcoin gains exceeding 2.5 million won each year. The Korea Times says that the tax will now go into force in January 2027.