South Korea to Implement 20% Tax on Crypto in 2023
- The South Korean government has introduced an amendment which will see profits made from crypto trading taxed at 20%.
- After being announced in July 2020, the new tax rules suffered several delays, and will now reportedly come into effect in 2023.
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After revising its tax rules in 2020, the South Korean government has introduced an amendment which will tax profits made from cryptocurrency trading.
As reported by Asia Today, the amendment is expected to be implemented within a month — following a meeting between vice ministers and the country’s Cabinet — introducing a number of additional taxes on capital gains. According to the amendment, citizens who have an annual income of more than 2.5 million won ($2,300) from trading cryptocurrencies will be taxed at 20%, which is significantly lower than the 50 million won ($46,000) threshold for taxing gains made from stocks.
The new tax rules were first revealed in July, with the South Korean government targeting an October 2021 implementation. The proposed tax regime was delayed several times in 2020, however, and the implementation date kept being pushed back. After comments from local crypto advocates were made, the government decided to push the date back to January 2022, citing the need to build the relevant tax infrastructure first. Asia Today has now claimed that this date has once again been pushed back, this time to 2023.
The South Korean government has also been focusing on protecting its citizens from illicit activities connected to crypto, such as money laundering and fraud. With that in mind, the country’s Financial Department introduced legislative amendments to its Special Payments Act back in November, which will ban virtual asset service providers from handling “dark coins”, privacy-oriented cryptocurrencies.
- One of the largest South Korean commercial banks, KEB Hana Bank, partnered with crypto custodian BitGo in order to set up a new crypto custody venture in the country.
- The new venture, which will use BitGo’s crypto security expertise and Hana’s experience in financial services and compliance, is expected to launch in the second half of 2024.
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- The now arrested Terraform Labs CEO had reportedly converted the majority of his illicit funds into BTC using foreign exchanged not under the jurisdiction of South Korea.
- While none of the assets tied to Do Kwon were recoverable, South Korean authorities continue to seize assets and properties tied to other executives of Terra.
- A person suspected to be Terra founder Do Kwon was arrested at the airport in Montenegro’s capital city of Podgorica with “falsified documents”.
- South Korean authorities have confirmed the individual was Do Kwon based on “photo data”, name, age, and nationality, but are still waiting for fingerprint information.