The taxation of cryptocurrency gains is a highly significant issue, and South Korea, a major crypto hub, is preparing to abolish the income tax on financial investments. The removal of income tax on financial investments directly concerns cryptocurrencies as well.
Income Tax on Gains from Cryptocurrencies Could Be Abolished
The Deputy Minister of the Tax and Customs Office at South Korea’s Ministry of Economy and Finance, Jeong Jung-hoon, mentioned in a policy briefing earlier this week that the abolition of income tax on gains from cryptocurrencies could be considered as part of the National Assembly’s plan to remove income tax on financial investments.
According to local media ZDNet’s report dated January 17, 2024, Jeong’s comment was in response to a question about whether the income tax on gains from cryptocurrencies, as well as from other financial investments, would be lifted.
The administration under President Yoon Suk-yeol is planning to abolish the income tax on financial investments such as stocks and funds to support citizens’ wealth accumulation and financial planning.
Tax Regime for Cryptocurrencies to Take Effect on January 1, 2024
The tax regime for cryptocurrencies in the country is set to take effect on January 1, 2025. Accordingly, a 22 percent income tax will be levied on cryptocurrency gains exceeding 1,865 dollars (2.5 million South Korean won). The tax regime for financial investment incomes is also planned to be implemented on the same date.
According to local news, Jeong stated that the South Korean government plans to amend the income tax law related to the taxation of financial investments by the end of January or the beginning of February. However, the National Assembly elections scheduled for April 10 indicate that there is limited time for the legislative body to discuss the proposed changes.
