The South Korean government has decided on a date for its 20 percent cryptocurrency taxation policy. However, the impending crypto tax regulation is being met with some resistance.
Kimchi Crypto Tax Law Gets Finalized Start Date
South Korea has once again altered the date for the implementation of its controversial crypto tax plan.
According to local news outlet Arirang on Monday (Feb. 22, 2021), South Korea’s Ministry of Economy and Finance stated that the country’s crypto tax policy would come into effect on January 1, 2022. The government is planning to levy 20 percent on capital gains from cryptocurrency trading.
South Korea’s 20 percent tax policy would affect crypto trading profits that exceed the 2.5 million won ($2,200) threshold. Also, traders would need to report gains on income statements, and failure to pay taxes would attract a fine.
The latest announcement comes after several meetings and postponements. The South Korean government began making plans to implement its crypto tax policy back in January 2020. However, some of the country’s economists argued that the proposal to tax crypto could stifle the growth of the nascent industry in South Korea.
Following a meeting with industry stakeholders, the government decided to postpone its 20 percent tax policy till 2022. The postponement was to give crypto exchanges time to set up modalities to ensure compliance with the new tax regulation.
Meanwhile, some South Korean citizens have signed a petition against the impending tax law. Since February 10, 2021, the petition has garnered about 36,000 signatures. If the petition is able to get 200,000 signatures, the government would need to respond.
South Korea Doubling Down on Clear-cut Cryptocurrency Regulations
South Korea’s tax law is an extension of the government’s drive to regularize the crypto trading market. Back in March 2020, the country’s parliament passed amended legislation that legalized virtual currencies.
By November, South Korean authorities turned their attention to Monero (XMR) and other privacy “coins” and prohibited crypto exchanges from listing these anonymous cryptocurrencies. At the time, the government said the move was part of efforts to curb money laundering crimes in the country.
Apart from its proposed crypto tax law, the South Korean government is working on a central bank digital currency (CBDC) project. According to BTCManager in October 2020, the country was on the final phase of its CBDC pilot program that was introduced in April. Also, South Korea recently published a book about the legal issues that come with CBDCs.