South Korea Plans to Use AI to Bolster Crypto Tax Enforcement

South Korea is preparing to tax capital gains on digital assets at an expected rate of 22%. The anonymity of cryptocurrency transactions, their movement across platforms and the vast volume of data pose challenges for conventional audits, prompting the National Tax Service (NTS) to plan the use of AI to improve transaction tracing and tax-evasion detection.

The NTS plans to invest about 3 billion won ($2.2 million) in an AI-integrated crypto tax analysis platform capable of processing large volumes of transaction data and flagging potential tax evasion. The system is expected to be deployed and tested before the digital-asset capital gains tax formally takes effect in 2027.