South Korea is going to impose a 20% income tax on capital gains from cryptocurrency transactions
from 2022, the government has announced even if the investors are of the view that the taxation plan
should be delayed.
This development comes after the government had discussed the matter during a vice-ministerial
interagency meeting chaired by Koo Yoon-cheol, head of the government policy coordination under the
Prime Minister’s Office.
Whatever capital gains that will happen from cryptocurrency transactions, it will be termed as
“miscellaneous income” and that will come under 20% tax from next year. Virtual asset gains must be
reported when filing for general income taxes in May 2023, reports Yonhap news agency.
In April, Finance Minister Hong Nam-ki had revealed that the government will go ahead with taxation
on transactions of cryptocurrency, which financial authorities categorise as “virtual assets,” not virtual
currencies.
In order to remove illegal activities in the virtual asset market, the government authorities extended
the special campaign period until September.
The government further made its stand very clear that “virtual assets cannot be recognised as (real)
currency or financial products” and that “no one can ensure” the currently-traded market value of
virtual assets.
According to the Financial Service Commission, the number of domestic cryptocurrency trading
companies stood at around 60 as of May 20.
South Korean finance minister Hong had earlier said cryptocurrencies “are intangible assets”,
adding that it was a “misunderstanding” to label them as currencies.
