South Korea’s decision to increase capital gains tax on cryptocurrency profits
South Korea is one of the most active countries in virtual currency transactions in the world. A large number of young people in South Korea are virtual currency investors and are keen to participate in virtual currency transactions. However, starting next year, these investors may have to pay taxes on virtual currencies. The media reported that the Ministry of Economy and Finance has decided to increase taxes on capital gains taxes. This tax is similar to the capital gains tax on other investment products.
Anonymous officials of the Ministry of Economy and Finance of South Korea revealed to media that relevant discussions are currently underway, and amendments to the relevant tax laws are expected to introduce a draft next year. However, the main purpose of this draft new tax law is to clarify the definition of virtual currency. Only after the virtual currency is included in investment products can it be levied an income tax. However, the media also mentioned that South Korea may not rely on the approval of the draft new tax law, because South Korean financial regulators have decided to levy taxes by other means. It is just unclear whether the current specific virtual currency capital gains tax has the same threshold and levy ratio as other investment products such as stocks and securities.