So, the Korean government will levy taxes on digital asset income from Jan. 1 of next year, as scheduled.
Coindesk Korea reported Thursday that a recent meeting of high-ranking ruling party, presidential and government officials decided to stick to the Jan. 1 date.
During the meeting, the Finance Minister and Deputy Prime Minister, Hong Nam-ki, reportedly insisted that taxation begin as scheduled, and the ruling party leadership conceded.
The Finance Ministry plans to impose a 20 percent tax on gains made in a one-year period of over KRW 2.5 million (USD 2,125) starting Jan. 1 of next year.
This comes even after ruling party lawmakers reached a consensus to delay the taxes ahead of next year’s presidential election, ostensibly due to tax infrastructure issues but perhaps playing to the party’s younger, crypto-invested voter base.
Indeed, the ruling party had been fighting with the Finance Ministry over the issue for quite some time. Now, however, it appears they’ve thrown in the proverbial towel.
The Finance Ministry is serious about getting its money, too.
The Ministry recently submitted to lawmakers an amendment to the National Tax Collection Act that would allow officers from the National Tax Service — Korea’s IRS — to “confiscate cryptoassets from tax ‘dodgers’ by freezing and seizing coins on exchanges” and “search homes and other premises if the need arises.”
Korea’s move to tax crypto earnings is in line with global trends. In the United States, for instance, the cryptocurrency tax rate for federal taxes is the same as the capital gains tax rate — 10-37% for short-term capital gains and 0-20% for long-term capital gains.
Aspiring crypto tax exiles, however, can reference Decrypt’s list of 11 nations that levy no taxes on cryptocurrency gains.