Posted on 07-22-2020.
South Korea’s Ministry of Economy and Finance has established a 20% income tax on cryptocurrency transactions. The new regulations have been included in the revised tax code. The news was announced by Dovey Wan, a founding partner at crypto asset holding company Primitive Crypto, in a tweet on July 22. https://twitter.com/doveywan/status/1285805418749386752 For income tax purposes, cryptocurrencies are now classified as “other profits,” with crypto-assets are seen as commodities, not currencies. The new tax is set to be payable by Korean residents whose annual profits exceed 2.5 million Korean won (around $2,088, at press time). Notably, the tax liability will only cover the profits that exceed the said amount. Considering the local 2% tax, the resulting tax rate will be 22%. Non-residents will be exempt from the tax. The amendments to the tax code will become effective in October 2021, should the parliament approve them. The discussions on the issue are expected to start on September 3, or earlier. Remarkably, rumors concerning the upcoming 20% tax for crypto-traders had been circulating for a week before the Ministry made it official. According to the country’s Financial Services Commission, the average daily cryptocurrency trading volume in Korea is around 1.33 trillion won ($1.1 billion). Over the first five months of 2020, it reached 7.6 trillion won ($6.33 billion). Follow us on Twitter and Facebook and join our Telegram channel to know what’s up with crypto and why it’s important.