- South Korean crypto investors will face 20% tax from 2022.
- The first 2.5 million won is tax-free.
- Over 38,000 users have already signed a petition in tax protest.
South Korean crypto investors who gain over 2.5 million won ($2,260) from crypto trading will face a 20% tax starting January 1, 2022.
Seoul Crypto Investors Will Face 20% Tax
According to the Korean Herald report, crypto investors will face 20% tax from 2022. However, the first 2.5 million won is tax-free. For instance, if an investor makes a 10 million won gain from trading Bitcoin. From 10 million won, 7.5 million won of that amount will be subject to the 20% tax.
Even more, cryptocurrencies received as an inheritance, or as gifts, will also be taxed.
The Herald adds,
“In such cases, the price of the asset will be calculated on the basis of the daily average price for one month before and one month after the date of the inheritance or gift.”
As the price surge continues, taxation has become a critical issue for investors in the cryptocurrency market. In addition, following South Korea’s acknowledgment of Bitcoin as a monetary resource, BTC and other digital currencies are currently not classified as tax-free assets.
Over 38,000 users have already signed a petition in protest of the forthcoming tax since February 10. If the number of petition signatures hits 200,000 by the end of March, it will push an official response from the South Korean government.
An expected revision to the Specific Financial Transactions Act will also see cryptocurrency exchanges fall under new regulatory scrutiny starting in March. Even more, the new regulation will also make exchanges implement real-name accounts.
In line to this, Kenya also recently started Digital Service Tax on Jan 1, 2021 which is expected to earn $45.5 million this year. This new tax implementation targets crypto exchanges and other online services.