South Korea plans to abolish cryptocurrency profits tax, will announce income tax amendments at the end of this month

According to the latest reports, the South Korean government decided to postpone the implementation of the "virtual asset tax" and "financial investment income tax (gold investment tax)" in the tax system revision plan at the end of 2022. Then until January 2025. However, recent news pointed out that Jeong Jung-hoon, director of the tax section of South Korea’s Ministry of Strategy and Finance, mentioned at a people’s livelihood debate that the government is considering abolishing the gold investment tax and plans to amend the income tax law to achieve this goal. This decision attracted widespread attention and discussion. The move to abolish the gold investment tax is considered an important step taken by the government to attract more financial investors and promote economic development. This move is expected to provide investors with more opportunities and flexibility, while also helping to enhance the competitiveness and attractiveness of the financial market. However, the abolition of the gold investment tax may also bring certain fiscal pressures, so the government needs to fully weigh and evaluate it in the decision-making process. Overall, though, the move to abolish the gold investment tax

The South Korean government is considering eliminating taxes on cryptocurrency gains in a bid to boost the industry and attract more investors and entrepreneurs. At the end of this month, they plan to release income tax amendments that include the elimination of crypto profits tax. This move will reduce the tax burden on investors, thereby increasing market activity and trading volume. In addition, the South Korean government hopes to enhance its competitiveness in the global cryptocurrency market through this initiative.

However, eliminating crypto profits tax may bring some problems. First, government tax revenue will decrease, which will have an impact on the fiscal situation. Secondly, the market may experience excessive speculation and instability, bringing risks to investors. Therefore, the economic impact of this move needs to be carefully considered.

Therefore, when the Korean government cancels the crypto profits tax, it should ensure that market supervision measures are strengthened to maintain the stability and healthy development of the market. At the same time, investors should also remain rational and cautious to avoid excessive speculation and losses.

Virtual asset tax will be re-examined

When asked further whether the virtual asset tax will still be levied as scheduled in January next year if the gold investment tax is cancelled, Zheng Zhengxun responded: "About The issue of virtual assets should be discussed in Congress." He said he plans to submit amendments to the income tax law to Congress at the end of January or early February and will explain its necessity and urgency. He hopes the Fiscal Strategy Council and Congress will take up the matter when they meet in February and hopes to resolve it before the election.

The government has announced its intention to cancel the gold investment tax and is also re-examining the taxation plan for virtual assets, which may eliminate the possibility of taxing virtual assets.

Relatively speaking, if the virtual asset tax is implemented as planned, according to the current Korean Income Tax Law, income from the transfer or transaction of virtual assets will be included in other income tax categories from January 1 next year. When income exceeds 2.5 million won, a tax rate of 22%, including local tax, will apply.

This policy has triggered controversy over "unfair taxation" because the tax exemption for virtual assets is only 2.5 million won, which is far lower than the 50 million won for stocks.

Virtual assets account for 70% of South Korea’s total overseas assets

The Korean National Taxation Service (NTS) issued an announcement in September last year to reveal the situation of citizens’ declaration of overseas assets that year. In the report, overseas assets such as virtual assets, stocks, deposits and savings totaled 186.4 trillion won (US$140 million), of which the total amount declared for virtual assets alone was as high as 130.8 trillion won (KRW), or US$98 million, accounting for more than 70% of the total. , the total number of accounts also reached 1,432, accounting for 20.7%.

Previously, the Indian government levied a 30% tax on capital gains from cryptocurrency transactions. At the same time, starting from July 1, 2022, it also stipulated that as long as you buy or sell cryptocurrency, you must pay a 1% tax deduction. Tax (Tax Deducted at Source, TDS) and crypto gift tax, which resulted in 95% of Indian trading volume flowing to overseas platforms.

If South Korea levies a 22% tax on virtual assets income tax as scheduled in January next year, whether it will affect South Korea’s status as a country that loves to speculate on currencies deserves continued attention.

The above is the detailed content of South Korea plans to abolish cryptocurrency profits tax, will announce income tax amendments at the end of this month. For more information, please follow other related articles on the PHP Chinese website!