The South Korean government has issued an amendment to impose a tax on cryptocurrency trading profits. After several attempts by congressmen, the plan has now become a reality.
New regulations impose a 20% tax on crypto profits
According to the “Asia Today Report”, the legislative announcement details that the amendment will take effect in February, and the profits from buying and selling cryptocurrencies in South Korea will be taxed at a 20% tax rate. However, this rule only applies to cryptocurrency holders with an annual income of more than 2.5 million won (US$2,300).
The Ministry of Economy and Finance said it plans to issue an executive order after a meeting with the cabinet of the central government. The amendment will apply to the country’s existing 2020 revised tax rules.
According to government documents, although the legislative notice will be issued next month, it clarifies that the new regulations will start to apply in 2022. The amendment also covers the new tax law for stock transactions.
In fact, listed stock transactions will also become part of the 20% taxation rule for profits exceeding 50 million won per year, which is significantly lower than the profits levied on cryptographic gains. Annual profits exceeding 300 million won will be taxed 25% on stock transactions.
South Korean government continues to delay cryptocurrency taxation plans
The South Korean government’s reports on delaying the introduction of a new crypto profit tax framework have repeatedly made headlines in 2020. In November, the National Assembly requested the postponement of this process, which was originally scheduled for October 2021. The Planning and Finance Committee of the National Assembly announced that it will postpone the new tax rules until 2022.
In addition, the Korean Blockchain Association requested regulators on October 14, 2020 to postpone the 20% encryption tax plan until 2023. The organization believes that local encryption companies need “reasonable time” to comply with the new regulations.
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