South Korea will implement a 20% tax on Bitcoin and cryptocurrency profits starting January 1, 2022. The nation’s Ministry of Economic and Finance announced that profits made from trading and holding cryptocurrencies would be subject to the tax, reported the Korean Herald on Monday. The 20% crypto tax will be triggered when profits made from cryptocurrencies exceed 2.5 million won, or roughly $2,300. Gains made up to this point will be tax-exempt.
South Korea previously aimed to levy the tax starting in 2020.
South Korea previously aimed to levy the tax starting in 2020, but pushback from cryptocurrency enthusiasts and lobbyists saw the government delay implementing the tax several times. The South Korean regime previously floated a 2022 start date. However, that date was then delayed until 2023, as reported earlier. Following South Korea’s recognition of Bitcoin as a financial asset, bitcoin and other cryptocurrencies will no longer be classed as tax-free hobbies. The new date for crypto tax has been set back to 2021. Cryptocurrencies received as part of an inheritance or those received as gifts will also be taxed under the new law.
Crypto regulations begin to tighten up as the industry gains mainstream exposure.
Regulators worldwide have shown concern over growing cryptocurrency usage as bitcoin continues to gain new all-time-highs. Bitcoin has surged massively this year as it continues to witness growing institutional interest. As reported earlier, crypto exchanges in Hong Kong are on tenterhooks as they await the outcome of a proposal by the city’s government to ban retail investors from trading in the city. The city’s Financial Services and the Treasury Bureau published the proposal to limit trading in cryptocurrencies to professional investors back in November last year.