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Crypto tax regimes have generally drawn criticism from South Korean crypto enthusiasts who believe the imposed taxes are heavier on cryptocurrency trading when compared with stock investment.
Authorities in South Korea are set to implement a 20% crypto tax on all profits made through crypto transactions from January 1, 2022. This is according to a report by the Korean Herald that stated that the country’s Ministry of Economy and Finance announced that crypto transactions would, henceforth, be subject to a tax regime following the recognition of cryptocurrencies like Bitcoin and others as a financial asset.
Previously, the crypto tax was scheduled to be enforced last year, however, this move had garnered consternations and criticism from crypto enthusiasts in the country. This forced the hands of the government to move the enforcement to 2023 first, before now floating the idea of 2022 as the new year of implementation due to the annual tax code revision approved by the National Assembly in December.
According to the report, the tax is only payable when the gains exceed 2.5 million won which is approximately $2300. As such, lesser gains would be free from taxation. Notably, crypto assets that are either received as an inheritance or even gifts are also subject to this tax regulation which “the price of the asset will be calculated on the basis of the daily average price for one month before and one month after the date of the inheritance or gift.”
New Crypto Tax Regime in South Korea Draws Criticism
Crypto tax regimes have generally drawn criticism from South Korean crypto enthusiasts who believe the imposed taxes are heavier on cryptocurrency trading when compared with stock investment.
One investor in crypto who says his name is Choi noted that “it’s unfair to charge that much (cryptocurrency) tax when compared to taxes on stocks.” He added that he started investing in the crypto industry when he saw how his colleagues were making gains from the crypto industry, this informed his choice to sell his stocks and start investing in the industry.
As part of the authorities’ effort towards the crypto industry regulation, crypto exchanges in the country would also now be mandated to “adopt information security management systems and real-name account requirements as well as anti-money laundering measures.”
This new regulation comes at a time when the crypto industry has gained wider interest by members of the public. Bithumb, a local crypto exchange, has seen an influx of new users recently, the firm recorded over 700% growth in its registration of new users for January alone.
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Oluwapelumi is a believer in the transformative power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas. When he is not writing, he is looking to meet new people and trying out new things.
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