Bitcoin Profit would now be Charged 20% of Tax under South Korea's New Law

News • 2020/07/23 • by Remitano

The Government of South Korea has agreed that a 20% tax would be charged on crypto profits. This decision was finally made on Wednesday after debating for several months. The finance and economy ministry said the tax would not be placed on digital assets with income less than 2.5 million won annually (about 2,000 dollars), as stated by a taxation policy revision notice which was brought to public notice on the 22nd of this month.

Yearly income greater than 2.5 million won will be charged 20% of tax. Tax on digital currencies would now be aligned with every other income taxes even though it is not seen as capital gains. Financial gain from Bitcoin sold, and other digital assets are called 'other income' in Korea, just like Japan.

As stated by the recent rules, foreign firms trading on local exchanges and investors who don't reside in South Korea must pay tax. On account of the company in charge of tax in Korea, charges from gains made from buying and selling should be deducted by exchange operators.

The new tax policy would be effective from October 1st, next year, once the government's legislative body has given it the go-ahead. The changes made to the tax law in May were instigated by the idea of having to tax any income.

There was a trial to tax digital currency previously by the Government. Then, it was unsuccessful because several ministries of the government could not conclude if Bitcoin had value.