South Korea’s National Assembly Budget Office has urged the government to build a tax filing system linked to cryptocurrency exchanges before virtual-asset income taxation begins on Jan. 1, 2027. The system would use exchange records to automatically calculate acquisition costs and gains, reducing the burden on investors who must otherwise reconstruct transactions across multiple exchanges and wallets. Under the current Income Tax Act, crypto income is classified as other income and taxed separately at 20% after necessary expenses and an annual 2.5 million won allowance, producing an effective rate of 22% including local income tax. Residents must calculate, file and pay the tax in May of the following year. The budget office identified four challenges: determining taxable income, building filing and payment infrastructure, clarifying rules for different transaction types and deciding which trading losses to recognize. The National Tax Service created a digital asset division in July and plans to complete an integrated virtual asset analysis system by year-end. The rollout has already been postponed three times, while investor opposition and public consent petitions have fueled speculation about another delay. Overseas exchanges, decentralized exchanges and over-the-counter trades using cold wallets remain difficult for authorities to trace. The budget office said automatic information exchanges under the OECD’s Crypto-Asset Reporting Framework are scheduled to start in 2027, although timelines differ across countries. The United States and Japan already use exchange transaction data to support taxpayer reporting.