South Korea's National Tax Service (NTS) has begun building an integrated cryptocurrency analysis system combining exchange and blockchain data ahead of the implementation of virtual asset taxation next year.
The system will merge transaction data submitted by exchanges with on-chain data to track cryptocurrency transaction flows for each taxpayer for up to five years. Industry observers say this marks a significant step in building infrastructure for taxation set to begin in January 2026.
According to the cryptocurrency industry on March 12, the NTS posted a tender notice for the integrated virtual asset analysis system project through the Public Procurement Service's government e-procurement system on March 9. The agency will accept proposals starting April 7, open bids on April 9, and select a contractor through proposal evaluation on April 14.
Following contractor selection, system development will proceed for approximately eight months. The NTS plans to conduct integrated testing and pilot operations in November, launch the system in December, and begin full operations in January 2026 after a one-month stabilization period.
The system's core function is to reconstruct transaction flows for each taxpayer through integrated analysis of cryptocurrency trading data. It will comprehensively analyze transaction statements and summaries from exchanges, overseas financial account reports, and on-chain blockchain data using wallet addresses identified through collected materials. This will enable authorities to view cryptocurrency holdings and transaction flows at a glance for up to five years.
With the project entering the bidding phase, preparations for next year's cryptocurrency taxation—previously postponed three times—are now effectively underway. Cryptocurrency taxation was introduced through a 2020 revision to the Income Tax Act but has been repeatedly delayed due to inadequate taxation frameworks.
The NTS is internally reviewing comprehensive taxation approaches for various types of cryptocurrency income, including airdrops and staking rewards. With the new system capable of analyzing blockchain data, these income types are also expected to become subject to taxation.
However, concerns about fairness in cryptocurrency taxation remain unresolved. Unlike stocks, cryptocurrencies are classified as intangible assets rather than financial assets, subjecting them to a 22% miscellaneous income tax including local taxes without loss carryforward deductions. Concerns have also emerged that taxpayers who cannot adequately explain complex transaction flows analyzed through the NTS system may face tax collection or penalty surcharges.
Oh Moon-sung, professor of tax accounting at Hanyang Women's University and president of the Korean Association of Tax Policy Studies, said: "The classification of cryptocurrency as intangible assets under International Financial Reporting Standards (IFRS) is provisional in nature, and directly applying this to miscellaneous income taxation is unreasonable. Even if comprehensive taxation is introduced, many factors must be determined at the actual taxation stage, such as when to tax each income type. Standards for each category must be established first."