The South Korean government said that it is conditionally prepared to carry out a review of crypto tax regulations – a year ahead of the promulgation of the country’s first crypto-specific tax law.
Per news agency Yonhap, Hong Namk-ki, the Deputy Prime Minister and the nation’s finance minister, stated that Seoul was willing to change the way it classifies crypto-related earnings in tax declarations – a factor that could possibly lead individuals and companies to pay less tax on their cryptoasset holdings.
As previously reported, from October next year, individuals who earn more than USD 2,100 per year from crypto-related activities will be obliged to pay 20% tax on their “excess” earnings (anything they earn above the USD 2,100 mark). Non-residents or overseas corporations will be obliged to submit tax data to crypto exchanges, where they could be taxed at source.
But critics of the new law claim that it is unfair that crypto has been classified as “other income,” rather than “financial assets.” The latter classification, used for stocks and other conventional assets, has a sliding tax rate and a much higher threshold. Indeed, individuals do not need to pay tax on the first USD 42,000 they earn from investments in KOSDAQ stock market-listed companies.
Hong suggested that a move to the “financial assets” class was a distinct possibility – but added a caveat, saying,
“Cryptoassets should not be treated in the same manner as slot machines.”
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