In 2023, South Korea will introduce a 20% tax on profits from crypto trading
After several postponements, the South Korean government is moving forward with a plan to tax cryptocurrency holders
On Wednesday, the South Korean government tabled an amendment to introduce a tax on profits from cryptocurrency trading.
After a legislative notice until 21 January, the amendment is likely to be implemented in February, Asia Today reported. However, Korea will only start imposing the cryptocurrency tax in 2023.
The proposal will introduce a variety of additional taxes on capital gains, with a progressive taxation schedule for profits in equity trading. For cryptocurrency holders, anyone with an annual income above 2.5 million won ($2,300) will be taxed at 20%. The threshold is much lower than that Profit Revolution defined for profits from stock trading, which will only be taxed if they exceed 50 million won ($46,000).
For cryptocurrencies owned before the start of the tax program, authorities will consider the highest market price immediately prior to 2021 or the actual acquisition price.
The proposed tax scheme has been postponed several times in 2020
Following pressure from local cryptocurrency advocates, the government initially postponed implementation until 2022. Now, the government seems to have set the final date, adding a further delay.
Although the relative popularity of cryptocurrencies in South Korea declined following the bear market of 2018, as evidenced by the closure of Binance Korea, the country remains an important hub for crypto adoption.
The South Korean government has supported a variety of blockchain-based initiatives in the contexts of digital identity and blockchain voting. In addition, it has designated the large urban centre of Busan to become a „blockchain city,“ although some reports suggest that such a classification lacks substance.
At the same time, the government has adopted a rigid stance for certain classes of crypto assets, requiring many local exchanges to remove privacy coins. In addition, it has placed executives of the prominent local exchange Bithumb under investigation for alleged fraud.