South Korean Government Proposes Tough New 22% Tax on Crypto Trading

Crypto trading profits could be liable to a 22% tax should the Korean National Assembly approve the newly tabled proposal.

By Paddy Baker

Jul 22, 2020 at 11:32 a.m. UTC

Updated Sep 14, 2021 at 9:34 a.m. UTC

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The South Korean government has proposed obliging crypto investors to pay more than a fifth of their profits to the state.

The Ministry of Economy and Finance tabled a proposal Wednesday to introduce a 22% tax – including the 2% local income tax – on crypto trading profits above 2.5 million KRW (~$2,000).
If approved by Korea's National Assembly, the tax rule will come into force in October 2021.
The new tax rule will also apply to non-residents and foreign companies who trade on Korean exchanges.
The news was originally reported by CoinDesk Korea.
Traders will be obliged to keep accurate records of their crypto activity and file with the National Tax Service at the end of the tax year on May 31.
Profits will be based on the difference in the asset's won price at the time of acquisition and time of sale – if the trader doesn't know the acquisition price, it will be assumed to be 0 won.
The government says the new tax rule is needed as many other countries have also introduced their own regimes for cryptocurrencies.
Cryptocurrency trading profits in the U.S. count as capital gains, where individuals can pay up to 25% in tax.

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