The South Korean government has announced a 20% tax rate for income generated from cryptocurrency trading in the country. Following a Tax Development Review Committee meeting on July 22, the Ministry of Economy and Finance announced its revised tax code detailing the tax rules for income generated from the crypto trading. The government states that introducing taxation for crypto is now necessary, pointing to the approach taken by other countries as well. In some countries, cryptocurrencies are already taxed under similar regimes for income from stocks and derivatives trading.
The gains made from cryptocurrencies are liable to taxation.
Under the new regulations, gains made from cryptocurrencies and intangible assets will be classified as taxable income, calculated annually. Income from crypto assets below 2.5 million won ($2,000) per year falls below the minimum threshold and will not be taxed. Incomes made above the threshold limit would be taxed at 20%, on a par with the basic tax rate for most other taxable income and capital gains in South Korea. The updated rules note how to calculate income derived from crypto trading, which should be reported and paid annually each May.
A survey reveals the two-third of the crypto community supports taxation.
A recent survey conducted by the South Korean wallet provider Childly found that 66% of respondents favor taxing cryptocurrency incomes. The survey asked more than 5,750 crypto users worldwide, and only one-in-five crypto users are opposed to crypto asset taxation. The report hinted that the crypto community is welcome to taxing cryptocurrencies. Only 20% of the polled crypto users disagreed with taxing cryptocurrencies at present, and 9% of surveyed crypto users think its too early to tax crypto.
The South Korean government has been working on its taxation policies for a long time, and it has now finally enforced a 20% tax above 2.5 million won threshold.