South Korea Approves Tax Amendments, Postpones Twenty Percent Cryptocurrency Trading Tax

South Korean National Assembly’s Strategy and Finance Committee has permitted new modifications to the tax law, deferring the introduction of the income tax on digital currency trading until the first month of 2022, as per a report published by local news outlet Yonhap News Agency.

Originally, the tax was planned to come into effect on 1st October, 2021. However, the board contended last week that local digital currency exchanges required additional time to build set-ups that are completely acquiescent to the new rules. Accordingly, the committee recommended deferring the modifications.

Initiating from the first month of 2022, income from digital currency trading will incur a tax of twenty percent. Nevertheless, this is only applicable if a trader’s profit would surpass two and a half million Korean won (approximately two thousand USD) in 1 year. All virtual asset trading-related income over that level will be taxed on an annual basis.

Presently, South Korean digital asset exchanges are also obliged to carry out KYC procedures for their customers by the month of September 2021 as part of the enactment of the regulation on special payments. The modifications also comprise a prohibition on anonymous digital assets.

Earlier, South Korea’s Ministry of Strategy and Finance suggested a tax on profits made by means of cryptocurrency-to-fiat transactions in the month of May. The aforementioned proposal also included cryptocurrencies sold by mining organizations and by means of ICOs.