Bitcoin Traders will be Taxed in South Korea

Kataryna Kovtun July 22, 2020

BitXmi

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The Ministry of Economy and Finance of South Korea has finally agreed on a plan to levy a 20% tax on income from operations with cryptocurrencies.

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The changes regarding bitcoin traders appeared in the updated tax code

For tax purposes, cryptocurrencies have been included in the “other income” category.

Bitcoin traders and residents will be subject to taxation, whose income at the end of the year will exceed 2.5 million Korean won ($ 2,088). Tax liabilities will arise from amounts over this amount. Taking into account the local tax of 2%, the final rate will be 22%. Residents of other countries will be exempt from tax.

The proposed changes, which will take effect from October 2021, will require parliamentary approval. Discussion of the tax code starts before September 3.

What exactly will the tax rate be?

Information from the Ministry of Economy and Finance confirms rumors a week earlier that the tax rate on capital gains for bitcoin traders could be 20%. The proposed changes to the existing legislation treat crypto assets as goods, not currencies.

According to the Financial Services Commission of South Korea, the average daily trading volume of cryptocurrencies in the country is 1.33 trillion won ($ 1.1 billion). From January to May 2020, this value reached $ 6.33 billion (7.6 trillion won).

Recall that the work on the bill on the introduction of a capital gains tax for transactions with bitcoin and other cryptocurrencies in South Korea was planned to be completed in the first half of the year.

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