South Korea adopts 20% tax on cryptocurrency gains
Last Updated on 26 July 2022 by CryptoTips.eu
The South Korean government has finalized its plan to impose a 20% tax on the capital gain generated by cryptocurrency trading. According to South Korean news agency Yonhap, from October 1st, 2021, the government will impose a 20% tax on income from crypto trading. Earnings of less than 2.5 million won per year (approximately 1,800 euros) will be exempt from this tax.
The ministry’s proposal will be submitted to the National Assembly for approval before September 3. As reported by The Block media outlet, South Korea has been planning to levy taxes on revenues generated by cryptocurrencies for more than 6 months. In comparison, in France, the capital gain realized by trading cryptocurrencies is taxed at the flat tax of 30% .
In addition, if your total capital gain over the year does not exceed 305 euros, you are exempt from tax. This sum is far from that newly applied by South Korea, much more advantageous.
A tax rate set at 20% therefore remains acceptable and places South Korea among the countries that tax its residents the least, even if many territories totally exempt capital gains from cryptocurrencies.
A general tax review for the country
South Korea’s finance ministry has said it is revising its tax code in a way that will help businesses overcome hardships caused by the Covid-19 pandemic and steer the country towards an economic recovery once the crisis is over.
A tax code revision aims to deal preventively with a post-corona virus world, while helping to overcome an economic crisis.
Regarding the gains made with stock trading, the government will gradually reduce the transaction tax to 0.15% in 2023, from 0.25% currently.
