South Korea’s tax authority is preparing to deploy artificial intelligence to track cryptocurrency investment gains as the government moves closer to implementing a long-delayed tax on digital assets.

According to a report by The Korea Times on Thursday, South Korea’s tax authority has opened a bid to build an AI-backed system to analyze cryptocurrency transaction data, as the government prepares for its planned 2027 tax on digital asset gains.

The project, valued at about 3 billion Korean won (around $2 million), will establish an integrated platform capable of processing large volumes of crypto trading data. The Korea Times reported that the NTS plans to use AI and machine learning to identify unusual transaction types and patterns and detect possible tax evasion.

The move comes as South Korea reportedly prepares to begin taxing cryptocurrency investment gains in January 2027, applying a combined 22% levy on profits exceeding 2.5 million won ($1,700).

NTS plans a system to analyze crypto transaction data

According to The Korea Times, the tax authority plans to select a contractor by March. System design is expected to begin in April, with testing phases scheduled throughout the year. A pilot program is planned for November, and the system is expected to launch between November and December.

The NTS said the platform will help authorities systematically manage and analyze large volumes of virtual asset transaction data.

Related: South Korea moves to require crypto, stock influencers to disclose holdings: Report

The system is expected to support tax audits, identify hidden income from delinquent taxpayers and detect possible tax evasion linked to crypto trading. 

The tax agency said it plans to share analysis data and lists of suspected offenders with other agencies, including the Korea Customs Service and the Bank of Korea.

South Korea prepares for 2027 crypto tax rollout

South Korea’s crypto tax framework has been repeatedly postponed despite being approved several years ago. 

In 2024, lawmakers debated whether to implement the country’s proposed crypto gains tax in 2025 or delay it further amid industry opposition and political disagreements over tax thresholds. Implementation has already been delayed three times since the law was passed in 2020.

The policy would impose a 20% income tax and an additional 2% local tax on annual cryptocurrency gains exceeding 2.5 million won. According to the Korea Times, the tax is now expected to take effect in January 2027.