South Korea's Tax Authority Seeks Advanced Crypto Tracking Tools

South Korea's National Tax Service (NTS) has initiated a tender process to acquire specialized software licenses designed to track virtual asset transactions. The procurement aims to bolster the agency's ability to identify and prosecute tax evasion within the cryptocurrency sector through enhanced digital forensics. The move is part of a strategic effort to expand enforcement capabilities before the country implements a formal crypto tax regime. While the current tender focuses on specific tracking licenses, it follows reports of a larger, AI-driven monitoring platform intended to process massive volumes of trading data to detect hidden assets and offshore evasion. The specific contract for the tracking software has a budget of 146.5 million won (approximately $99,500). According to the NTS, the tool will enable officials to monitor transactions in real-time, visualize the flow of funds between private wallets and exchanges, and investigate unreported gifts or inheritance transfers. This infrastructure is being developed ahead of a planned January 2027 tax rollout. Under the proposed rules, crypto gains exceeding 2.5 million won (roughly $1,700) would be subject to a 22% combined tax rate, consisting of a 20% income tax and a 2% local tax. However, the policy remains a point of significant political contention, with the opposition People Power Party proposing its complete removal due to concerns over fairness and double taxation.