20% Tax on Income from Virtual Asset Trading
The South Korean government has decided to impose a tax on an annual cryptocurrency trading profit of 2.5 million won or more. The measure will be implemented next year.
In the global cryptocurrency market, the Bitcoin price is moving around US$50,000 after having jumped about 70 percent in six weeks or so. This rally is because an increasing number of traditional financial companies are accepting it. For example, the first-ever Bitcoin ETF has been approved in Canada and government employees in Miami can receive their salaries in Bitcoin.
In addition, Tesla CEO Elon Musk bought US$1.5 billion of Bitcoin and BNY Mellon announced that it would purchase the coin.
In South Korea, income from virtual asset transfer or lending will be subject to 20 percent taxation when it exceeds 2.5 million won. The tax base is the transfer price minus incidental expenses and acquisition price. When it comes to virtual assets owned before Jan. 1, 2022, the acquisition price will be the market price as of Dec. 31, 2021.