South Korean tax authorities are preparing to use artificial intelligence to track cryptocurrency investment returns as the government moves closer to implementing a long-term tax on digital assets.
According to a report by The Korea Times on Thursday, South Korea’s tax authorities have launched a bid to build an artificial intelligence system to analyze cryptocurrency transaction data as the government prepares for its planned 2027 tax on profits from digital assets.
The project, worth about 3 billion won (about $2 million), will establish a unified platform capable of processing large volumes of crypto trading data. The Korea Times reported that the NTS plans to use AI and machine learning to identify unusual transaction types and patterns and detect tax evasion.
The move comes as South Korea is reportedly preparing to tax income from cryptocurrency investments in January 2027, using a combined 22% tax on profits above 2.5 million won ($1,700).
NTS plans a system to analyze cryptographic transaction data
According to The Korea Times, the tax authorities plan to select a contractor by March. Design of the system is expected to begin in April, with testing phases planned throughout the year. The pilot program is scheduled for November and the system is expected to be operational between November and December.
NTS said the platform will help authorities systematically manage and analyze large volumes of virtual asset transactions.
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The system is expected to support tax audits, detect hidden income of delinquent taxpayers and detect tax evasion related to crypto trading.
The tax agency said it plans to share analytical data and lists of suspected criminals with other agencies, including the Korea Customs Service and the Bank of Korea.
South Korea prepares crypto taxation for 2027
South Korea’s crypto tax framework has been repeatedly delayed despite being approved several years ago.
In 2024, lawmakers debated whether to implement the country’s proposed tax on crypto income in 2025 or delay it amid industry opposition and political disagreements over the tax cap. Since the adoption of the law in 2020, its implementation has already been delayed three times.
The policy imposes a 20% income tax and 2% local surcharge on annual cryptocurrency profits exceeding 2.5 million won. According to the Korea Times, the tax is now expected to take effect in January 2027.
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