The South Korean government has issued an amendment to introduce a tax on profits from trading cryptocurrencies. The plan has now become a reality after several attempts by the legislature to delay it.
New rules impose a 20% tax on crypto profits
According to Asia Today, the legal notice detailed that the change will come into effect in February and profits from buying and selling cryptos in South Korea will be taxed at 20%. However, the rule only applies to crypto holders with an annual income of over 2.5 million won ($ 2,300).
The Ministry of Economy and Finance said the enforcement decree would be promulgated after meeting with the central government cabinet. The change will apply to the country’s existing revised tax rules for 2020.
Although it will go into effect next month, the notice clarifies that the new rule will take effect from 2022, according to government documents. The change also affects new tax regulations for stock transactions.
In fact, transactions in publicly traded stocks will also be part of the 20% tax rule for profits over 50 million won per year, which is significantly lower than that imposed on crypto profits. Stock trades are taxed at 25% for annual profits in excess of 300 million won.
The Korean government has kept the delay on the crypto tax plan
Reports by the South Korean government delaying the introduction of a new tax framework for crypto profits made headlines several times in 2020. In November, the National Assembly called for the process originally planned for October 2021 to be delayed. The National Assembly’s Planning and Finance Committee announced that it would postpone the new tax rule to 2022.
In addition, on October 14, 2020, the Korea Blockchain Association asked regulators to postpone the 20% crypto tax plan to 2023. The group argued that local crypto firms need “a reasonable amount of time” to comply with the new rules.
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