As a seasoned analyst with extensive experience in global financial markets, I find South Korea’s approach to cryptocurrency taxation quite intriguing. The country’s recent decision to introduce a 20% crypto taxation starting in Jan. 2025, along with the proposed flexibility for investors to claim up to 50% of the total sale price as the acquisition cost, seems like a thoughtful balance between protecting investors and regulating the market.
The Korean Democratic Party plans to implement a 20% tax on cryptocurrencies, which is set to take effect from January 2025.
As a researcher, I’m sharing some insights about the recent changes in the taxation of crypto profits in South Korea. Initially proposed under the administration of former President Moon Jae-in in October 2021, this new framework will implement a 20% national tax and an additional 2% local tax on crypto profits surpassing the 50 million Korean won ($35,919) mark.
As a crypto investor, I appreciate the recent adjustments made to the framework, ensuring that most retail investors like myself are shielded from the impact of the new tax regulation. Moreover, it’s reassuring to know that the proposal now enables us to claim up to 50% of the sale price as the acquisition cost, even if our records aren’t perfectly accurate. These changes aim to bring stability to the market and alleviate any investor concerns about these updates.
South Korea has no capital gains taxes on crypto.
Also foreigners can get a 19% flat tax rate for income tax (ends up more like 20.9% after resident tax).
That said, it is impossible for foreigners to sell crypto for fiat on Korean exchanges unless they create a company.
— Dacian (@DevDacian) June 26, 2024
Initially, the policy of the administration was scheduled for implementation on January 2023. Nevertheless, the government led by President Yoon Suk Yeol delayed it until 2025 due to concerns that the introduction of the new tax might overburden investors and potentially harm the market.
In June, officials from South Korea’s Ministry of Economy and Finance suggested to their legislative assembly that they should think about eliminating income tax on cryptocurrency gains entirely, as reported by CNN. This proposal is part of a broader strategy by the government to completely eliminate taxes on financial investments, which encompasses both stocks and funds.
Important votes related to tax policies are approaching in November. On the 25th, the Tax Subcommittee of the Strategy and Finance Committee will scrutinize the proposed plan. Following this, a full vote in the plenary session is expected on the 26th. The Democratic Party of Korea is currently fine-tuning the structure before its release. At present, South Korea is seeking a balance by safeguarding its investors while also controlling its market.
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2024-11-20 17:16