South Korea Finance Minister: ‘Taxing Crypto Is Inevitable Next Year’

South Korea Finance Minister: ‘Taxing Crypto Is Inevitable Next Year’

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In brief

Cryptocurrency taxes are coming to South Korea. According to the country’s finance minister, capital gains taxes on crypto earnings are inevitable in 2022.

South Korea’s finance minister Hong Nam-ki has said that taxes on cryptocurrency in the country are on the way, per Reuters. 

“It’s inevitable, we will need to impose taxes on gains from trading of virtual assets,” Hong said in a news conference today. 

Hong previously said that capital gains taxes on cryptocurrency sales may begin in January of 2022. Per the Reuters report, any annual gains of more than 2.5 million won ($2,253) from crypto trades will be subject to a capital gains tax of 20%. 

In addition, Hong has described cryptocurrencies as “intangible assets,” suggesting it would be a misunderstanding to label them as currencies. What’s more, Hong warned that trading digital tokens is prone to new forms of illegal fundraising and fraud, and investors should be vigilant. 

South Korea and crypto

South Korea has paid close attention to regulating the crypto industry in recent months. 

On March 25, new financial reporting rules came into force for South Korea’s crypto businesses. Non-compliance could result in a $44,000 fine or a five year prison sentence.

Earlier this month, the Financial Supervisory Service (FSS) and other regulatory authorities in South Korea agreed to tighten regulations on cryptocurrency transactions. Major South Korean banks also raised concerns over cryptocurrency speculation at the time.

And just this week, South Korea’s Financial Services Commission (FSC) reminded employees working on crypto regulation to file reports about their cryptocurrency investment portfolios, as part of the FSC’s code of conduct.

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