South Korea To Reveal Crypto Taxation Rules In July

  • Speaking to the parliamentary finance committee, South Korea’s Finance Minister confirmed that cryptocurrencies will be taxed.
  • While the country’s tax revenue from foreign firms could increase, the new rules could make some local firms liable for foreign taxation.
South Korean Deputy Prime Minister and Finance Minister Hong Nam-ki

South Korean Deputy Prime Minister and Finance Minister Hong Nam-ki. Ministry of Economy and Finance/The Korea Herald

South Korea’s government is set to announce its plans to impose a tax on cryptocurrency later this year, Korean news outlet JoongAng Daily reported on 17 June.

The publication quoted the country’s Finance Minister Hong Nam-Ki, who was speaking to the parliamentary finance committee on Wednesday. During his speech, the official said that the ministry will reveal further details on its plans to tax cryptocurrency in the country next month.

He said to the committee:

“The government has continued to realign its tax system to reflect changes in market conditions, but it is especially working to refine its list of taxable items and types of tax this year. Personally, I believe a digital tax needs to be imposed as a new type of tax, and the government too is considering moving in that direction.”

As previously reported, the Korean government was considering imposing a 20 percent tax on cryptocurrency income at the start of 2020. Though there are still no specific taxation standards for crypto assets, the Finance Ministry was considering classifying the returns made on cryptoes as a type of “other income”, which would place it in the same category as lottery earnings.

The decision to establish a tax structure for cryptocurrencies in South Korea comes shortly after major cryptocurrency exchange Bithumb received a $68.9 million tax bill from the country’s taxing agency. Later, based on the grounds that cryptocurrencies are not legally recognized as currency in the country, Bithumb decided to contest the high tax bill in court.

Discussion
Related Coverage
BitGo Partners With Hana Bank on South Korean Crypto Custody Business
  • 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.
September 5, 2023, 11:29 AM
bitgo

Shutterstock

Do Kwon’s Illicit Funds Reportedly Not in South Korea
  • 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.
Terra Founder Do Kwon Reportedly Arrested in Montenegro
  • 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.