South Korea signals a shift toward automated enforcement, announcing the development of an artificial intelligence (AI)-based system that will allow authorities to detect unreported digital asset gains. Elsewhere, industry groups in Brazil have cried foul over the possibility that the government is extending a levy to stablecoin operations, branding the move as unlawful.
In early 2025, South Korean officials raised alarm over the growing popularity of speculative digital asset trading in the country, especially among the younger generation, expressing fears that the increasing number of individuals participating in the activity is unprepared for the sector’s volatility.
To curb excessive speculation, the government issues a mandate requiring a 22% tax rate on digital asset income above KRW2.5 million ($1,655) beginning in 2027. This latest regulation also seeks to stifle tax evasion, which could worsen if left unchecked.
But regulating the market forms only part of the country’s strategy to address loopholes tied to digital asset gains, with the national tax agency devising the creation of a system that will speed up the crackdown on tax evasion and uphold fairness.
Last week, local media outlet The Korea Times disclosed that preparations are underway for the National Tax Service’s (NTS) KRW3-billion ($2.02-million) project intended to support the government’s new regulation.
The initiative, which was posted on the electronic bidding platform run by the state organization Public Procurement Service, will establish a tracking system utilizing AI and machine learning to analyze digital asset transactions for corresponding taxation. The platform will also have the capacity to identify hidden income of delinquent taxpayers.
The NTS is expected to select and contract the successful bidder before the end of the month and begin designing the system by April. The new platform is projected to be operational between November and December this year.
“It is expected to serve our goal of collecting individuals’ virtual asset transaction data starting in 2027,” said the national tax agency, adding that all information gathered by the system about suspected offenders and digital asset analysis data will be shared with other government agencies.
Brazil’s crypto groups wage war against proposed tax
In other news, Brazil’s flourishing digital asset market hits a bump over the weekend as industry groups representing over 850 companies across the local fintech, digital asset, and market infrastructure sectors denounced the government’s recent discussions on taxing stablecoin transactions.
Talks about expanding the Tax on Foreign Transactions (IOF) to stablecoins made headlines in February, with the government planning to propose a 3.5% levy on purchases and remittances made with stablecoins, irking industry giants.
The suggested legislation will only exempt transactions below 10,000 Brazilian reais ($1,910), and if passed, the government is expected to rake in billions in revenue.
Brazil’s monthly stablecoin transaction volume is estimated to be between $6 billion and $8 billion, according to data provided by an auditor at Receita Federal, the country’s tax authority.
But getting the proposed legislation enacted will be challenging, as crypto groups are prepared to block the mandate.
The crypto faction, comprising ABcripto, ABFintechs, Abracam, ABToken, and Zetta, issued a joint statement criticizing the move, claiming it runs against the country’s legal framework as stablecoins do not equate to a fiat currency, which is stated clearly under Brazil’s Virtual Assets Law—Law No. 14,478—enforced in 2022.
“In this context, any expansion of tax incidence on operations with stablecoins through a decree or administrative rule is illegal, since acts of this nature cannot create or expand a tax triggering event,” the group stated.
They added that while the central bank has the power to regulate the crypto market, it is not the same as deciding to tax it, stressing that the proposal must undergo a proper legislative process if officials are eager to implement it.
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Source: https://coingeek.com/south-korea-ai-crypto-tax-hunt-brazil-weighs-stablecoin-levy/