South Korea: Authorities reinstate imposition of Crypto Tax from 2022

Deputy Prime Minister and Minister of Strategy and Finance, Hong Nam-ki have reinstated that the South Korean law for taxing income from virtual asset businesses will be implemented as scheduled, i.e., 2022 onwards.

The authorities asserted that no further delay will be accommodated in lieu of maintaining legal and financial stability. While former announcements saw the Democratic Party of Korea continue discussions on the postponement of taxation through the Virtual Asset Task Force, yet this will be the second official statement in a row confirming no further delay in the crypto taxation period.

Today, at a parliamentary audit by the National Assembly’s Planning and Finance Committee, Hong Nam-ki noted, “It is judged that it is difficult to re-adjust or postpone the taxation of virtual assets in terms of legal stability or policy reliability.”

He further argued that the implementation of crypto tax will come without any hurdles as all formalities are completed, and a basic setup is in place. Hong stated that the authorities have successfully completed the taxation infrastructure for real-name accounts, along with the list of taxable cryptocurrencies through exchange platforms in the nation.

“We believe that the taxation infrastructure for the use of real-name accounts is in place, and virtual assets traded through exchanges are sufficiently taxable,” he told a local news publication.

Crypto Tax dates finalized amid internal conflict of interest among officials

Last week saw the South Korean government confirm the timeframe to begin crypto tax regulations in the country. According to official statements, the cryptocurrency taxation policy will be implemented on January 1 next year, which will impose a 20% tax on the profits of the transactions. Regardless of the government’s internal conflicts of interest on taxing crypto, the Ministry of Strategy and Finance is determined to prevent any potential delays.

“The taxation of virtual assets will be implemented from January 1 next year as it is now…Recently, the virtual asset market has been hot, and even though investors have suffered damage, there was an opinion that it is right to raise the tax first before creating a proper safeguard to protect them…There is currently no law that can replace the current law, so the taxation will proceed as scheduled,”, a government official told a local news publication.