The South Korean government has finally decided to tax cryptocurrency profits starting from 2023.
Following a government-issued amendment on Wednesday, the country will proceed to tax profits from cryptocurrency trading. The legislative notice will last until January 21, and there is a possibility that the amendment will be passed next month. Whatever the case may be, the new levy on digital assets will not take effect until 2023.
The new rule is introducing a series of additional taxes on capital gains. There is also a progressive taxation schedule for gains in stocks. Furthermore, anyone making more than 2.5 million won ($2,300) in annual profits from cryptocurrencies will be taxed at 20%. As for its stock counterpart, taxation starts at a profit of 50 million won ($46,000) annually.
Unfortunately, individuals who got into cryptocurrencies earlier will not be exempted. According to the new rule, authorities will choose the highest between the market price before 2023 and the actual acquisition price.
While the country remains one of the early strongholds of cryptocurrency adoption, the relative popularity of cryptocurrencies decline in Korea following the 2018 bear market. South Korea’s government has also been hitting hard on cryptocurrency assets. First, they demanded the delisting of privacy coins on local exchanges and then pushed to place a ban on the sharing of order books.
Binance recently revealed that it was shutting down its Korean office due to low trading volumes and lack of liquidity.