South Korean Finance Minister Hong Nam-ki has confirmed that the government will tax capital gains from cryptocurrency trading starting next year, amid growing opposition to South Korea’s new cryptocurrency tax regime.
It is inevitable that we will have to impose tax on profits from trading in virtual assets, the minister said when asked if the tax should be delayed until the government has established proper oversight of the sector, Reuters reported on Tuesday.
Hong pointed out that cryptocurrencies like Bitcoin (BTC) are taxed as intangible assets, noting that treating them as a currency is a misnomer. The minister also warned that cryptocurrency trading is vulnerable to new forms of illegal fundraising and fraud, and urged investors to remain vigilant in their investment decisions.
As previously reported, South Korean lawmakers initially discussed a 20 percent capital gain on cryptocurrency exchanges in July 2020, and proposed that any annual gain over 2.5 million won ($2,200) would be taxable starting in October 2020. In late 2020, the South Korean government officially delayed the introduction of a new tax regime on cryptocurrency income until 2022, as it faced strong criticism and pressure from local cryptocurrency lobbyists regarding the proposed cryptocurrency tax.
South Korean Prime Minister Kim Bu Gyum recently promised to examine the tax system of cryptocurrencies to ensure that traders are treated fairly under the law.
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