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South Korea to Impose 20% Income Tax on Crypto Transactions

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South Korean officials announced a 20% tax on crypto transactions, and despite the backlash from the investors, the plan is most likely to move forward.

From the 2022 assessment year onwards, all non-sale crypto transactions will be subject to statutory gift and inheritance tax rates of up to 50%. Meanwhile, stocks and bonds investment will also be taxed on capital gains of over 50 million KRW ($45,000).

Under these new regulations that were proposed at the vice-ministerial interagency meeting earlier this year, gains on cryptocurrency transactions will be deemed as “miscellaneous income”. Investors will now need to submit their gains from crypto transactions while filing income taxes in 2023.

This bold step from the South Korean government will be deemed beneficial in limiting illegal activities in the crypto market. That said, so far, a group of 676 people have been accused of tax evasion and accounted for $25 billion of South Korea’s tax gap. Now the crypto exchanges in South Korea will be forced to share trade and transaction records with the South Korean government, a deliberate effort to limit the expansion of the tax gap.

“When capital gains are generated from transactions of virtual assets, we cannot help imposing the tax to promote taxation equality”, said Hong Nam-ki, the finance minister of South Korea, insisting that virtual assets cannot be recognized as a currency. While the investors are strongly against these new tax regulations, citizens, in general, are in support of it, a study claimed.

gulations that were proposed at the vice-ministerial interagency meeting earlier this year, all gains on cryptocurrency assets will be deemed as miscellaneous income. Investors will now need to submit their gains from crypto transactions while filing income taxes in 2023.

This bold step from the South Korean government will be deemed beneficial in limiting illegal activities in the crypto market. That said, so far, a group of 676 people have been accused of tax evasion and accounted for $25 billion of South Korea’s tax gap. Now the crypto exchanges in South Korea will be forced to share trade and transaction records with the South Korean government, a deliberate effort to limit the expansion of the tax gap.

“When capital gains are generated from transactions of virtual assets, we cannot help imposing the tax to promote taxation equality”, said Hong Nam-ki, the finance minister of South Korea, insisting that virtual assets cannot be recognized as currency. While the investors are strongly against these new tax regulations, citizens in general are in support of it, a study claimed.

Also Read: Cryptocurrencies to be legalized in India as per HDFC Report

Source: South Korea to Impose 20% Income Tax on Crypto Transactions

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