South Korea adopts OECD’s CARF for global crypto reporting, enhancing tax transparency and aligning with international standards by 2027.
South Korea will participate in the OECD’s new Crypto‑Asset Reporting Framework (CARF). This decision means that transaction data from foreign investors trading on local platforms like Upbit and Bithumb will be shared with tax authorities in other countries. Conversely, the foreign crypto of South Korean residents will be reported to the National Tax Service. The government will build the reporting system step by step, starting with domestic data collection in 2026 and full international sharing in 2027.
South Korea Aligns with 48 Nations in Crypto Reporting Pact
In addition, such a move will place South Korea on a par with 48 other nations, such as the United Kingdom, Germany, and Japan, which have also expressed a commitment to adopt CARF. South Korea signed the Multilateral Competent Authority Agreement of CARF in late 2024 at a meeting of the OECD Global Forum. This act highlights the efforts of the government to be transparent in terms of taxes.
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Moreover, the Ministry of Economy and Finance expects to publish specifications of CARF implementation until the end of the year. These regulations will regulate the reporting of transaction details and personal information to tax authorities by exchanges, and the reporting must be in line with the global standards.
Moreover, the future framework will mean that any foreign investor trading cryptocurrency in South Korean platforms will automatically share their trade data with their national tax authority. Meanwhile, local investors trading in foreign crypto platforms will have such transactions recorded locally.
Today in South Korea, the reporting system already demands residents who have a balance in their overseas banking resources in excess of half a billion won to voluntarily disclose. This encompasses assets such as stocks, deposits and crypto holdings. This year reported foreign crypto assets hit 11 trillion won, a growth of 70 billion won over the last year.
South Korea Adopts OECD’s CARF, Aiming for Crypto Tax Transparency
Even though the entire taxation of crypto-invested income does not take effect until 2027, nations like the United States and Germany already have these in place. Nevertheless, the government stresses that CARF is nothing more than a system of information exchange and does not imply a new tax burden at the moment.
In 2022, the OECD proposed CARF to deal with the opaque nature of crypto asset transactions. In contrast to more conventional financial instruments, crypto assets have frequently been able to avoid international reporting regimes. CARF aims to close this loophole. Crypto Asset Service Providers must collect and report user transaction details automatically.
South Korea shows its desire to make domestic regulations and international tax transparency norms compatible by adopting CARF. This is one way to limit the cross-border tax evasion and can coordinate crypto regulation across the world. Exchanges and regulators will have to start preparing now, although implementation itself is still two years away. This involves the reconfiguring of systems to capture finer user information and establishing bilateral or multilateral data-sharing deals.
To conclude, South Korea’s joining the CARF of the OECD can be seen as an important step towards the global regulation of crypto. Once in place, such a framework will improve tax transparency, limit evasion opportunities and strengthen the commitment of South Korea to international financial standards. On the eve of rollout, domestic exchanges will collaborate closely with the government to have a successful and smooth rollout.
