January 1st, 2022, South Korea will begin taxing cryptocurrency income via the new tax law. S. Korea’s Finance Minister and lawmakers have rejected plans to postpone the new crypto tax law on Sept. 26. Other National Assembly legislators cited a lack of tax infrastructure as a reason to prefer delaying the crypto tax law.
Starting from January 2022, S. Korean crypto investors will file their 2022 tax returns for January 2022 to May 2023. In that filing, crypto transactions will need to be duly stated. They shall also be paying on their crypto income the capital gains tax. In a 2020 amendment to the tax law, crypto assets’ taxation got included identically as is taxes for stocks. It levied a 20% tax for all crypto transactions ranging above 2.5 million Korean won (KRW).
Notably, the recently went Sept. 24 (2021) regulatory compliance deadline for S. Korean crypto exchanges was only met by 29 CEXs. Only four largest crypto exchanges (CEXs) met the regulatory stipulations of having user accounts recorded with their real-name bank accounts. By doing so, Bithumb, Upbit, Korbit and Coinone were permitted to provide KRW trading pairs.
Tightening crypto regulations is on the agenda of the S. Korean government. As reported in June by Bitcoin.com, the S. Korean government caught hidden cryptocurrencies worth over US$47 million from tax evaders. On Sept. 20 (2021), Bitcoin.com reported the S. Korean government confiscated cryptocurrencies valued over US$5 million from 1661 investors.