South Korea brings forward 20% crypto tax implementation to 2022

After much back-and-forth, South Korea appears to have finally set a hard date for the implementation of cryptocurrency taxation. The country’s Ministry of Economy and Finance announced that profits from both trading and holding cryptocurrencies will be taxed, The Korea Herald reported on Monday.

South Korea will impose a 20% tax on Bitcoin ( BTC) and cryptocurrency profits starting January 1, 2022. The country’s Ministry of Economy and Finance announced that both profits from trading and holding cryptocurrencies will be taxed, The Korea Herald reported Monday.

The tax will be triggered when profits from cryptocurrencies exceed 2.5 million won, or about $2,300. Gains up to that point will be tax-free.

South Korea had previously aimed to start collecting taxes from 2020, but the government has repeatedly delayed the implementation of the tax due to the push by cryptocurrency enthusiasts and lobbyists. As Cointelegraph previously reported, the South Korean government had previously proposed a start date of 2022, however, this date was subsequently postponed to 2023.

Now, 2022 seems to be back on track again. After South Korea recognized Bitcoin as a financial asset, BTC and other cryptocurrencies will no longer be listed as tax-free options.

Cryptocurrencies received as part of an inheritance or as gifts will also be taxed. Speaking of gifts and inheritances, the Herald said:

“In this case, the price of the asset will be calculated based on the average daily price in the month before and after the date of inheritance or gift.”

More than 38,000 citizens have signed a petition protesting the impending tax since February 10. If the petition reaches 200,000 signatures by the end of March, it will force the South Korean government to make an official response.

Starting in March, revisions to the Specified Financial Transactions Act are also expected to subject cryptocurrency exchanges to new regulatory scrutiny. According to The Korea Herald, in addition to stronger information security procedures and anti-money laundering measures, the new regulations will force exchanges to implement "real-name accounts." (Cointelegraph)