South Korea plans 20 per cent tax on crypto income
The Ministry of Economy and Finance is reviewing a new crypto taxation plan, sources say
The Ministry of Economy and Finance of South Korea is considering introducing a 20 per cent tax on any income from cryptocurrency transactions.
The plan was reported in local English-language news outlet, The Korea Times, citing government sources. According to the outlet, the Ministry has already asked its office of income tax to examine the new taxation policy.
Some local experts cited by The Korea Times believe that the government is likely to consider crypto gains not as "capital gains", like those from capital transfer, but under the designation of "other income".
In South Korea, 40 per cent of overall 'other income' is subject to 20 per cent tax, while the other 60 per cent is under an exemption.
The country has been developing the new crypto taxation plan for over a month. As Currency.com has already reported, the National Tax Service will be allowed to tax crypto gains as soon as the measure is introduced.
Crypto income is already a focus of debate in South Korea. Crypto gains earned by foreigners in the country are treated as other income and the tax is collected via crypto exchanges.
For instance, South Korea-based Bithumb recently received a tax bill of $69m (£53.1m, €62.2m), but the company refused to pay it and applied to the court.
South Korea is currently the world's third-largest crypto exchange market by volume, behind only the US and Japan . In the meantime, South Korean government is looking to fully legitimise the crypto sector and allow it to evolve into a wholly regulated industry.