South Korea’s National Tax Service (NTS) clarified that users holding virtual assets in non-custodial decentralized wallets, such as MetaMask, are exempt from reporting on overseas financial accounts, according to a report by Digital Asset.
This clarification comes after the NTS’s decision to include virtual assets in reporting requirements starting June 2023 for holdings exceeding 500 million won.
The move addresses uncertainty among crypto enthusiasts regarding reporting obligations for decentralized wallets.
According to the NTS, “Overseas business operators only provide programs to store and store personal encryption keys, etc., and do not have control over them, so they are not involved in selling, buying, or exchanging, or holding virtual assets in wallets such as cold wallets are not subject to overseas financial account reporting.”
The exemption also applies to wallets from overseas corporations like Ledger and MetaMask. Tax accountant Kim Ji-ho emphasized the reporting’s purpose, highlighting the challenge of obtaining overseas tax data.
Kim Ji-ho, an NTS accountant, said, “The purpose of reporting overseas financial accounts is to report because there are limitations in obtaining overseas tax data, but there was controversy as to whether the Metamask wallet was an overseas wallet.”
This clear stance provides relief to individuals using non-custodial wallets, while assets held on centralized exchanges abroad remain subject to reporting requirements.
Also Read: South Korea to Reveal Officials’ Crypto Holdings in 2024
