National Tax Service Confirms Reporting Obligations for Overseas Financial Accounts Even if Foreign Exchanges Go Bankrupt

The National Tax Service (NTS) has stated that individuals must report their overseas financial accounts if they hold accounts with foreign virtual asset exchanges, even if those exchanges go bankrupt. The NTS explained, "If a resident holds an account opened with a foreign virtual asset provider for digital asset trading, there is an obligation to report the overseas financial account even if the provider goes bankrupt." A resident, referred to as Mr. A, was a creditor of a foreign exchange that went bankrupt in November 2022 and had a balance in his exchange account before the bankruptcy. Mr. A inquired whether he was obligated to report the overseas financial account when the account became subject to claims due to the bankruptcy, and the NTS responded. According to Article 53 of the law, if the balance of an overseas financial account exceeds 500 million KRW, it must be reported to the head of the tax office by June of the following year. Starting in 2023, digital assets have also been included in the reporting requirements. In 2026, the scale of digital assets reported in overseas financial accounts was 10.5 trillion KRW, a decrease of 5.4% compared to the previous year, while individuals reported 9.8 trillion KRW, an increase of 5.4%, but corporations reported 700 billion KRW, a decrease of 61.1%. The NTS attributed the overall decrease in scale to "the impact of a general price decline."

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.