The government of South Korea is planning to introduce a twenty percent tax on income from crypto transactions. The country’s Ministry of Economy and Finance is currently reviewing a proposal for a crypto taxation plan. News outlet Pulse cited multiple sources within the government.
The law would mean that the crypto tax would be labeled as ‘other income’ instead of ‘capital gains’. In South Korea forty percent of the ‘other income’ box is taxed twenty percent, and the remaining sixty percent is tax-deductible.
South Korea has been planning taxes on crypto gains for quite some time now. Once the government approves the law, the Korean National Tax Service can tax crypto gains immediately.
Crypto taxes in other countries
Taxes on cryptocurrency gains aren’t new. There are plenty of countries that have applied a similar tax. For example in Singapore and Malaysia crypto companies need to pay taxes over their crypto gains as if it’s regular income. But there are no taxes over capital gains. In Portugal businesses need to pay taxes, but the government does tax personal income.
Living on the blockchain island of Malta you’ll only pay taxes when you are day trading. In addition mining and trading is exempt from taxes in Belarus until at least 2023. Switzerland would be another example of a crypto-friendly country. There they consider mining as self-employment and the government considers earnings as income tax. At the same time professional trading is subject to a business tax.
Cryptocurrencies are high on the agenda in many countries. The rise of stablecoins and the announcement of Libra in the summer of 2019 made many alarms go off. Central banks are thinking about launching their own national digital currencies, while regulatory frameworks are being formulated. Old money needs to compete with new money, and this often is a mean battle. We’ve seen this happen for centuries, for example with the introduction from automobiles, telephones, and even the internet.
Also published on Medium.