Cryptocurrency Tracking Software Tender Launched by South Korean Tax Authority
The National Tax Service of South Korea has initiated a bidding process to develop transaction monitoring software for cryptocurrencies aimed at identifying individuals evading tax obligations.
According to a government procurement announcement, South Korea's National Tax Service (NTS) has launched a competitive bidding process for software license acquisitions designed to monitor virtual asset transactions as part of their tax evasion enforcement initiatives.
The procurement announcement detailed that the contract involves "virtual asset tax evasion response transaction-tracking software licenses," with an allocated budget totaling 146.5 million won (approximately $99,500), which encompasses value-added tax, and requires delivery within a 30-day timeframe following contract execution. The submission window for bids is slated to run from April 28 through April 30, while the evaluation of proposals has been scheduled for May 7.
While the procurement announcement provides minimal information regarding the technical specifications of the software, ZDNet Korea, a local media outlet, reported based on information from an official within the NTS scientific investigation unit that the software would enable tax officials to conduct real-time monitoring of crypto transactions, create visual representations of transfers occurring between particular wallet addresses and exchanges, and facilitate investigations into concealed assets, overseas tax evasion schemes, and unreported inheritance or gift-related transfers.
This tender comes on the heels of previous domestic news coverage indicating that South Korea had been developing a more comprehensive AI-powered crypto surveillance system in anticipation of the nation's scheduled 2027 tax implementation.
South Korea expands enforcement capabilities ahead of crypto tax rollout
The tax authority's initiative to acquire a crypto monitoring solution seems to be a component of a wider strategy to enhance enforcement infrastructure in preparation for the forthcoming implementation of a cryptocurrency taxation framework.
According to The Korea Times, a local news publication, on March 12, the NTS initiated a tender for an artificial intelligence-supported system designed to examine crypto transaction information. The agency's reported objective is to create a platform with the capacity to handle substantial quantities of crypto trading data for the purpose of detecting potential tax evasion activities.
The implementation of South Korea's crypto taxation policy is presently anticipated to commence in January 2027 following multiple postponements. According to the policy framework, capital gains exceeding 2.5 million won (roughly $1,700) would be subjected to a total 22% tax levy, which consists of a 20% income tax component and an additional 2% local tax component.
The proposed tax implementation continues to face political opposition. On March 19, the People Power Party, which represents South Korea's primary opposition, put forward a proposal to eliminate the planned taxation on cryptocurrency profits, contending that the policy creates issues related to fairness, potential double-taxation scenarios, and enforcement challenges.