South Korea has taken another significant step in its crypto regulatory initiatives. The Ministry of Economy and Finance signed the Crypto Asset Reporting Framework Multilateral Competent Authority Agreement (CARF MCAA) on November 27th, amid the country’s crypto tax implementation plans. At the 17th Global Forum of the Organisation for Economic Co-operation and Development (OECD), South Korea adopted the framework to enhance tax transparency.
Notably, the CARF MCAA, established by the OECD in 2009, promotes international tax transparency through implementing standards for the exchange of tax-related information. While 48 countries, including South Korea, Germany, Japan, and France, signed the agreement, they will share crypto transaction data using a standardized framework developed by the OECD and G20.
Reportedly, South Korea plans to revise domestic laws and ink separate agreements to share crypto asset transaction data with other countries by 2027. This move is expected to enable the government easier access to crypto transaction data and tax-related activities.
The move comes amid South Korea’s crypto tax implementation plans. The country has proposed to levy a 20% tax on crypto gains exceeding 50 million won (approximately $35,919). Initially launched in 2021, the proposal intended to collect tax with a threshold of 2.5 million won ($1,791). However, due to investor concerns, the implementation was delayed twice.
Jin Seong-jun, the Democratic Party’s policy committee Chairman, previously raised concerns over the inconveniences of tracking international crypto transactions. While this posed challenges in imposing taxes, the new development is set to resolve the issue. Seong-jun stated that the automatic data-sharing system would make taxing foreign exchange transactions easier.
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In related news, Australia invited public feedback on the country’s decision to adopt CARF. On November 21, Australia released a consultation paper evaluating the feasibility of implementing CARF into the country’s tax law. While the consultation is open till January 24, 2025, comments and responses will be made public unless confidentiality is specifically requested.
