South Korean Government Proposes Tough New 22% Tax on Crypto Trading
Crypto trading profits could be liable to a 22% tax should the Korean National Assembly approve the newly tabled proposal.
Jul 22, 2020 at 11:32 a.m. UTCUpdated Aug 19, 2021 at 3:15 a.m. UTC
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The South Korean government has proposed obliging crypto investors to pay more than a fifth of their profits to the state.
- The Ministry of Economy and Finance tabled a proposal Wednesday to introduce a 22% tax – including the 2% local income tax – on crypto trading profits above 2.5 million KRW (~$2,000).
- If approved by Korea's National Assembly, the tax rule will come into force in October 2021.
- The new tax rule will also apply to non-residents and foreign companies who trade on Korean exchanges.
- The news was originally reported by CoinDesk Korea.
- Traders will be obliged to keep accurate records of their crypto activity and file with the National Tax Service at the end of the tax year on May 31.
- Profits will be based on the difference in the asset's won price at the time of acquisition and time of sale – if the trader doesn't know the acquisition price, it will be assumed to be 0 won.
- The government says the new tax rule is needed as many other countries have also introduced their own regimes for cryptocurrencies.
- Cryptocurrency trading profits in the U.S. count as capital gains, where individuals can pay up to 25% in tax.
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