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South Korea is considering canceling the cryptocurrency capital gains tax. The Ministry of Economy and Finance has decided to postpone the implementation of the "virtual asset tax" and the "financial investment income tax" (gold investment tax) until January 2025. According to reports from Korean media, Jung Jeong-hun, the head of the planning and finance department of the tax office, mentioned during a public debate held at the Seoul government building that the government plans to abolish the gold investment tax. Jung said, "It is clear that we need to amend the income tax law to abolish the gold investment tax." When further asked if the virtual asset tax would be collected as scheduled in January next year if the gold investment tax were canceled, Jung Jeong-hun responded, "The issue of virtual assets should be discussed in the National Assembly." He stated, "We plan to submit a revised income tax law at the end of January or early February, explaining its necessity and urgency. We hope that the Financial Strategy Committee and the National Assembly can handle this when they meet in February, and if possible, we hope to resolve it before the general election."
With the announcement of the intention to cancel the gold investment tax by the government, and the response indicating a need for a reexamination of the virtual asset taxation scheme, it does not rule out the possibility of canceling the taxation on virtual assets. On the other hand, if the virtual asset tax is collected as scheduled, according to the current income tax law in Korea, income obtained from the transfer or trading of virtual assets from January 1 next year will be classified as other income tax. The applicable tax rate is 22% when income exceeds 2.5 million Korean won, including local taxes. This policy has sparked controversy over "tax injustice" because the tax-free amount for stocks is up to 50 million Korean won, while the tax-free amount for virtual assets is only 2.5 million Korean won.
In September of the previous year, the National Tax Service of South Korea revealed the situation of national declaration of overseas assets. In the report, the total amount of overseas assets, including virtual assets, stocks, deposits, and savings, amounted to 186.4 trillion Korean won (USD 140 million). Among them, the reported total amount of virtual assets reached as high as 130.8 trillion Korean won (KRW), which is approximately USD 98.07 million, accounting for more than 70% of the total and a share of 20.7%, with a total of 1,432 accounts.
Previously, the Indian government imposed a 30% capital gains tax on cryptocurrency trading, and since July 1, 2022, it has also stipulated that anyone buying or selling cryptocurrency must pay 1% tax deducted at source (TDS) and cryptocurrency gift tax, leading to 95% of Indian trading volume flowing to overseas platforms. If South Korea imposes a 22% tax on virtual asset income as scheduled in January next year, whether it will affect South Korea's status as a "crypto-loving" country is worth continuous attention. |
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Post time 30-1-2024 20:58:39