- Cryptocurrency traders in South Korea face a 20% tax on their gains under government plans
- Authorities plan to treat cryptocurrencies as “goods with property value”
- Cryptocurrency is extremely popular in South Korea and has so far attracted no tax
South Korean cryptocurrency investors might be in line for a nasty shock if the recommendations of a recently submitted crypto taxation bill are implemented. The bill, which has been proposed by the National Assembly, includes a 20% capital gains tax on earnings made through crypto trading and suggests that digital assets should be treated as goods rather than currencies, which is in line with other countries’ treatment of the digital assets.
Cryptocurrency To Be Classed as Commodities or Goods
The popularity of cryptocurrency trading in South Korea has forced lawmakers to find ways of treating crypto gains in a way that is fair on traders but means that the government doesn’t miss out on its share. The country seems keen on following the examples set by China in 2013 and the U.S. in 2015 in defining Bitcoin and other cryptocurrencies as commodities according to court documents:
Until now, virtual assets have been recognized only as a function of currency and have not been subject to income tax, but recently, virtual assets are increasingly being traded as goods with property value.
By treating cryptocurrencies in such a way, lawmakers can ascribe existing taxation and other guidelines to the asset class, which it seems they are keen on doing.
July Deadline for Finalized Proposals
Any taxation proposals put forward are subject to change during discussions at the National Assembly before they can be passed into law. The government announced that it will finalize and publish the cryptocurrency taxation plan by the end of the month, which doesn’t leave a lot of time, but if the plan is to place digital assets into an existing asset class then a July deadline is certainly feasible.