South Korea plans to apply, starting next year, a 20% tax on capital gains from cryptocurrency transactions. All this, despite growing calls from investors to delay the tax plan.
Specifically, the government announced its plan after discussing the matter during an inter-institutional meeting at the vice-ministerial level. Chaired by Koo Yoon-Cheol, head of the Government Policy Coordination Office under the Prime Minister’s Office.
In this regard, Hong Nam-ki, Minister of Economy and Finance, said that: “The Government will go ahead with the imposition of taxes on cryptocurrency transactions.”
“When capital gains are generated from virtual asset transactions, we cannot avoid imposing the tax. To promote tax equality ». Furthermore, he added: “It is inevitable. We will have to impose taxes on the profits from trading virtual assets. ‘
S.Korea fin min says taxing gains from cryptocurrency trading next year ‘inevitable’ – Reuters: S.Korea fin min says taxing gains from cryptocurrency trading next year ‘inevitable’ Reuters https://t.co/tKftrANgHn
– Trade the journey (@JourneyTrade) April 27, 2021
South Korea to assign a 20% tax on cryptocurrency transactions
In fact, the earnings from cryptocurrency transactions will be classified as “miscellaneous income.” And, they will be subject to a 20% tax, starting in 2022.
Very important, virtual asset earnings must be reported at the time of filing general income taxes. Specifically, in May 2023.
With this intention, crypto investors, with capital gains above $ 45,000, will qualify for the new tax rate. Additionally, transfers unrelated to the sale of crypto asset ownership will also be subject to “legal tax rates on donations and inheritances.”
For this purpose, the Financial Services Commission (FSC), the country’s financial regulatory body, also designated it as the highest government office. In charge of supervising and regulating the virtual asset market. Likewise, the Ministry of Science and ICT selected him. In order to manage the promotion and growth of the relevant Blockchain industry.
The authorities also plan to restrict cryptocurrency-related business operators from conducting transactions using their own companies. With the aim of avoiding price manipulation. And unfair activities.
South Koreans support taxes!
In this context, a recent poll shows that the majority of South Koreans support taxes on capital gains on cryptocurrencies.
According to the media outlet, Yonhap News Agency, which reported that more than 53% of South Koreans support the taxation of cryptocurrencies.
Indeed, the survey was conducted by Realmeter. In fact, 500 people over the age of 18 were surveyed. To all this, South Korea is a technology-savvy nation. And young investors have been enthusiastically embracing cryptocurrencies.
As a result, 60% of the women agreed with the proposed tax resolution. While only 47.3% of men supported it. Younger people (under 30 years old) also tended to oppose taxes. Many in their 30s, 40s, and 50s were heavily supportive of taxes.
Generally speaking, South Korea has been stepping up its efforts to form comprehensive regulations for the class of crypto assets. What do you think about this? Let us know in the comment box.
I close with this phrase by José Cecilio del Valle: «The government that demands a tax increase with one hand. He must with the other seek the increase of wealth.