South Korea will impose a 20% tax on bitcoin (BTC) and cryptocurrency revenues from January 1, 2022. The country’s Ministry of Economy and Finance announced that profits generated by trading and owning cryptocurrencies will be taxed, the Korea Herald reported on Monday.
The tax will be levied when the cryptocurrency surplus exceeds 2.5 million won, or approximately $ 2,300. Profits up to this point are not taxed.
South Korea previously intended to introduce the tax from 2020, but cryptocurrency enthusiasts and lobbyists have seen the government postpone the tax on several occasions. The start date for 2022 was set by the South Korean system, but that date has been pushed back to 2023, Cointelegraph reported earlier.
Now it looks like 2022 is back in the game. After South Korea recognized Bitcoin as a financial asset, Bitcoin and other cryptocurrencies will no longer be classified as tax-free hobbies.
Cryptocurrencies received as part of an inheritance or received as a gift are also taxed. When it comes to gifts and inheritance in cryptocurrency, Bulletin says:
“In such cases, the price of the asset is calculated on the basis of the average daily price for the month before the date of inheritance or gift and one month after it.”
More than 38,000 residents have already signed a petition protesting the impending tax from 10 February. If the number of signatures on the petition reaches 200,000 by the end of March, the South Korean government will accept an official response.
From March, as part of the expected revision of certain financial transaction laws, cryptocurrency exchanges will be subject to new regulatory controls. In addition to stricter cybersecurity and the fight against money laundering, the new regulation will also force exchanges to introduce “real name accounts”, according to the Korea Herald.