taxation

The National Tax Service of Korea (NTS) announced on Thursday that it has begun constructing a tracking system for cryptocurrency investment gains, aimed at supporting the government's expansionary fiscal policy and the need to increase fiscal revenue.The system's construction comes just before the government's plan to tax profits from virtual assets starting in January next year. According to the announcement, the NTS has tendered for the "Comprehensive System for Virtual Asset Transaction Analysis," a project published on the electronic bidding platform by the Public Procurement Service, responsible for government and public institution procurement, with a budget of 3 billion won (approximately 202,000 USD). According to the plan, the winning bidder will be selected and contracted within this month, with system design starting in April, followed by multiple rounds of testing before entering a trial operation phase in November, and is expected to officially launch within the year.The NTS stated that the system will start collecting individual virtual asset transaction data from 2027, systematically managing and analyzing vast amounts of transaction information to more effectively detect tax evasion, including identifying hidden income of tax delinquents through tax audits.Notably, the NTS plans to incorporate artificial intelligence and machine learning technologies to analyze and track abnormal transaction types and patterns. Additionally, relevant virtual asset analysis data and lists of suspects will be shared with other government departments such as the Korea Customs Service, the Statistics Korea, and the Bank of Korea.According to Korean tax law, starting in January next year, the portion of annual income from virtual assets exceeding 2.5 million won will be subject to a comprehensive tax rate of 22% (including 20% income tax and 2% local income tax).

According to Cryptopolitan, Strive board member Pierre Rochard pointed out this week that despite the continuous improvement of scaling technologies (i.e., tools that accelerate transactions and reduce costs), the way Bitcoin is taxed is the fundamental reason it cannot function like a regular currency in everyday transactions.Pierre Rochard stated that Bitcoin payments grow faster in low-tax regions. Under current U.S. tax law, Bitcoin is considered property rather than currency. This means that every time someone uses Bitcoin for consumption, whether purchasing coffee, services, or goods, it triggers a tax reporting obligation, and if the value of Bitcoin has increased since the buyer acquired it, capital gains tax may also be due.

Bitcoin treasury company Strive director Pierre Rochard stated that Dubai, El Salvador, Thailand, Puerto Rico, Singapore, and Germany (after holding for one year) do not tax Bitcoin, and that the U.S. taxing Bitcoin is "unreasonable."Pierre Rochard described the relevant policies as a poor choice that undermines Trump's proposed "Bitcoin superpower" plan.

Indian financial authorities have reiterated their concerns about cryptocurrency trading, warning that it could complicate tax enforcement. The Indian tax department stated that offshore trading platforms, private wallets, and DeFi tools pose risks that could make tracking cryptocurrency income "almost impossible." Cryptocurrencies enable "anonymous, borderless, and nearly instantaneous" value transfers, allowing individuals to move funds without regulated financial intermediaries.India currently imposes a flat tax of 30% on profits from all cryptocurrency activities, and additionally, all transfers (regardless of profitability) are subject to a 1% withholding tax. While India officially allows cryptocurrency trading under a high tax regime and has approved the return of major U.S. exchange Coinbase in 2025, the Indian government's overall stance on cryptocurrencies remains cautious and complex.

As 2026 approaches, U.S. crypto investors are about to face a tax environment that is markedly different from previous years. Several new regulations will come into effect during the 2025 trading year and the 2026 tax season, referred to in the industry as the "watershed moment" for crypto taxation.One of the core changes is Form 1099-DA. Starting in 2025, "brokers" such as centralized exchanges in the U.S. will be required to report users' crypto asset sales and dispositions to the IRS, and will send out the 1099-DA form for the first time in 2026. The initial forms will mostly only include gross proceeds from sales, excluding cost basis; if taxpayers fail to report clearly on their own, the IRS may default the cost to zero and automatically issue tax notices.Meanwhile, "cost accounting by wallet" will replace the previously commonly used "pooling" method. The IRS requires that each trading platform account or wallet track costs separately, and when selling, only the asset batches within that wallet can be matched. This will have a particularly significant impact on users with multiple exchanges, DeFi, and self-custody.Industry tax experts point out that reconstructing historical ledgers and organizing all on-chain and off-chain transaction records will be a one-time but extremely cumbersome task. Although the IRS provides a transitional safe harbor in the 2024-28 program, the compliance window is short, and few investors will complete it.Tax experts warn that without advance preparation, the 2026 tax season could "automatically trigger" issues due to data mismatches. Under a more data-driven and stricter IRS oversight, actively recording, planning ahead, and collaborating early with tax professionals familiar with crypto assets is becoming a "required course" for crypto investors.

The Liberal Democratic Party of Japan and the Japan Innovation Party proposed in the 2026 fiscal year tax reform outline to classify virtual currencies as financial products that contribute to public asset accumulation, and are considering applying the same separate taxation system for virtual currency income as for stocks and investment trusts.According to the outline, spot trading, derivatives trading, and ETFs of virtual currencies are listed as separate taxable items, and losses from virtual currency trading can be carried forward for three years. In addition, financial products invested in virtual currencies are also included. Currently, the proposal does not explicitly mention the taxation details for NFTs and reward transactions such as staking and lending. The outline also mentions that future gains from virtual currencies may be subject to taxation when transferred overseas.

The EU's latest directive on tax transparency for digital assets will come into effect on January 1, officially incorporating cryptocurrency activities into the EU's tax reporting system.The directive, named DAC8, requires crypto asset service providers to collect and report detailed information about users and transactions to national tax authorities, which will then share this data among EU member states. This reform addresses a long-standing gap, as certain parts of the crypto economy have faced less regulatory scrutiny than traditional financial accounts. Under DAC8, tax authorities can regulate the holding, trading, and transfer of cryptocurrencies with the same transparency as bank accounts. Exchanges, brokers, and other crypto service providers must now view tax reporting as a core operational requirement rather than a secondary compliance matter. Although the directive takes effect on January 1, businesses have a limited transition period to adjust their systems before enforcement.

According to Yahoo Finance, Aave founder Stani Kulechov stated that the recent DeFi tax guidelines released by the UK's HM Revenue and Customs (HMRC) may mark a turning point for crypto lending in the UK.The document indicates that depositing digital assets or stablecoins like USDC or USDT into a DeFi platform will not be considered a taxable disposal at the time of deposit. In other words, users depositing their cryptocurrency assets into DeFi platforms for lending, staking, or borrowing will not trigger capital gains tax. Capital gains tax will only be due when users actually dispose of their assets (for example, selling, converting, or otherwise cashing out), rather than merely transferring tokens in or out of a DeFi protocol.Under the new approach, these routine DeFi transactions fall into the category of "no gain, no loss," thus providing investors with clearer and more practical tax guidance. Kulechov added that the simplified tax method reduces the burden, enabling broader adoption by institutions while also streamlining operations for regular retail users.

According to Nikkei News, the Japanese government and the ruling party are working to adjust the taxation policy on cryptocurrency trading income, planning to uniformly impose a 20% income tax rate regardless of the transaction amount, allowing it to enjoy the same treatment as stocks, investment trusts, and other financial products.This move aims to reduce the tax burden on investors and invigorate the domestic trading market. The Japanese government plans to replace the current comprehensive taxation method with a separate taxation method, meaning that cryptocurrency trading income will no longer be combined with other income such as wages and business income, but will be taxed separately. The government's goal is to include this adjustment in the 2026 tax reform outline, which is expected to be finalized by the end of the year.Currently, Japan adopts a comprehensive taxation method for cryptocurrency trading income, which combines it with other types of income and applies a progressive tax rate based on the total income amount, with a maximum rate of up to 55%. The Financial Services Agency of Japan plans to submit an amendment to the Financial Instruments and Exchange Act to the Diet during the 2026 regular session, aimed at strengthening strict regulation of cryptocurrency trading.The amendment will explicitly prohibit insider trading using undisclosed information and require cryptocurrency issuers to fulfill information disclosure obligations. With the advancement of tax reform, it is expected that investment trust products containing cryptocurrency components will also be deregulated in Japan.

According to a report by Kim Gap-lae, a senior researcher at the Korea Capital Market Institute, the virtual asset tax policy originally scheduled for implementation in 2027 may face a fourth delay. Despite having already experienced three postponements, key institutional flaws remain unresolved, including the lack of clear definitions and standards for various forms of income such as lending profits, airdrops, and hard forks.In particular, the tax rules for overseas exchanges and peer-to-peer (P2P) transactions are almost nonexistent, which could lead to an unfair tax burden between domestic exchange users and overseas platform users. The government expects to achieve comprehensive taxation only after the 48-country virtual asset information-sharing agreement takes effect in 2027.Experts recommend establishing a "Special Task Force for the Reform of the Virtual Asset Tax System" to clarify the tax rules for various types of income and to create an information collection system connected to exchanges and personal wallets to ensure the smooth implementation of the policy. Currently, South Korea has approximately 10.77 million virtual asset users, a number close to that of stock investors.

ChainCatcher News, U.S. Senate Finance Committee Chairman Mike Crapo announced that a hearing titled "Review of Digital Asset Tax Policy" will be held on October 1, 2025, at 10 AM Eastern Time in Washington, D.C.Representatives from Coin Center, ASKramer Law, Coinbase, and the American Institute of Certified Public Accountants will testify on the inclusion of cryptocurrencies and blockchain assets in the federal tax code. This discussion aims to modernize policies regarding compliance in the global cryptocurrency market, which has a total size of $2.5 trillion, based on previous House hearings and recommendations from the AICPA.

ChainCatcher news, according to Jinshi, the U.S. Senate group will hold a hearing on the taxation of digital assets on October 1.

ChainCatcher news, according to News 1, the South Korean exchange Coinone sold virtual assets worth approximately 4.356 billion won (about 3.09 million USD) to Upbit and Korbit between the 8th and 31st of last month.Benefiting from the price increase, Coinone realized an additional profit of about 220 million won. This sale aligns with the "Roadmap for Corporate Participation in the Virtual Asset Market" announced by the Financial Services Commission of South Korea in February this year, allowing non-profit organizations and exchanges to liquidate virtual assets for personnel costs and tax expenditures.Coinone stated that the related funds will also be used to cover other operating costs.

ChainCatcher news, according to Cointelegraph, Ukrainian MP Yaroslav Zhelezniak stated on social media that the Ukrainian parliament passed a first reading of a bill on the legalization and taxation of cryptocurrency on Wednesday. The draft bill stipulates an 18% income tax and a 5% military tax on digital asset gains. The bill provides for a preferential tax rate of 5% for the first year of converting digital assets to fiat currency.Zhelezniak stated in a declaration: "There is not much point in discussing the details now; there will be many changes before the second reading. It is still unclear whether the regulatory body will be the National Bank of Ukraine or the National Securities and Stock Market Commission."

ChainCatcher news, according to Cointelegraph, New York State Assemblyman Phil Steck has proposed Bill 8966, which aims to impose a 0.2% sales tax on cryptocurrency and NFT sales and transfers. The revenue will be specifically allocated to school drug abuse prevention programs.Before the bill can take effect, it must first receive approval from the state assembly committee, then be submitted for a vote by the full assembly, and finally be signed by the governor. If passed before September 1, the bill will take effect immediately, potentially bringing significant tax revenue to New York State.

ChainCatcher news, according to The Block, the White House Digital Assets Working Group has suggested in a 168-page report that the IRS clarify the tax timing for Bitcoin mining income, or alternatively, tax it at the time of sale to avoid "double taxation" of "mining income tax + capital gains on sale."BitFuFu CEO Leo Lu stated that this move could significantly reduce the tax burden on miners and accelerate the mainstream adoption of Bitcoin. Similar tax deferral proposals have already been introduced in Congress, such as H.R.8149.

ChainCatcher news, according to Jinshi Data reports, U.S. President Trump signed the "Big and Beautiful" tax and spending bill into law on July 4 local time. The U.S. House of Representatives passed the "Big and Beautiful" bill, pushed by President Trump, with a vote of 218 in favor and 214 against on the afternoon of the 3rd.The bill has been controversial due to cuts in federal aid, increased long-term debt, and tax cuts for the wealthy and large corporations. Two Republican congressmen voted against the bill during the vote. The bill was passed by the Senate on the 1st of this month.