South Korea Considers A 20% Income Tax On Cryptocurrencies

The latest Bitcoin and altcoin news take us to South Korea, where the Ministry of Economy and Finance is considering imposing a 20% tax on income from all cryptocurrency transactions. This is all part of a report published by the local English-language news outlet The Korea Times on January 20, showing that the ministry had ordered its income office to review cryptocurrency taxation. As it stands, South Korea considers the new tax and even though the plan is not finalized, the government is serious about the 20% tax on crypto income.

News of the proposed rate also follow the reports from earlier this month which showed that South Korea is drafting a tax regime for profits made from trading cryptocurrencies. Right now, many are speculating that the government may categorize gains obtained through crypto trading as “other income” and not capital gains. This category also includes gains made from lectures, lottery purchases and prizes.

As South Korea considers a 20% income tax on crypto, it is evident that a clear scheme is much needed in the country. This became apparent when at the end of December and just before 2020, the major cryptocurrency exchange Bithumb announced that it was considering administrative litigation over an .
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9 million tax bill which it believes has no legal basis.

Recent reports also indicated that the firm decided to follow through and take the tax authorities to court. As we previously reported in our cryptocurrency news and guides, the cryptocurrency regulation in South Korea has seen significant developments ever since Park Yong-Jin, a member of the National Policy Committee from the ruling Democratic Party, introduced the first ever taxation policy for crypto in 2017.

In 2019, the National Assembly’s national policy committee was also in the news for approving a bill that would give more legitimacy to digital assets by subjecting them to more scrutiny and government oversight. Three years later, we can see that South Korea considers the 20% income tax bill on crypto and is serious about its plans.

The idea of an income tax is not spread everywhere but in South Korea comes during a phase when the market is gradually increasing. Bitcoin, for instance, managed to gain around 40% this month alone and despite the recent correction, has been a profitable investment for many traders.