Cryptocurrency investors believe that digital asset versus equity capital gains will be taxed unequally.
In South Korea, regulators and investors do not
came to the general decision on the draft law on taxation of income from cryptocurrencies. Investors have submitted two petitions:
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On the postponement of the introduction of taxation for 1-2 years, when protective measures will be developed for investors in cryptocurrencies.
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On unequal taxation of income from cryptocurrencies and share capital.
The fact is that from January 1, 2022, a 20% tax will be imposed on income from cryptocurrencies over 2.5 million won (about $ 2,104). Equity income tax will take effect in 2023 and will start at 50 million won (about $ 42,140).
The finance minister, in turn, said that the state will not provide tax breaks on income from cryptocurrencies, since they are not financial assets. For the same reason, they have a lower threshold for tax deduction.
Incheon National University professor Hong Ki-Yong disagrees with the postponement of the tax renewal. But he believes that gains from cryptocurrencies and equity capital can be classified in the same category.
“Since cryptocurrencies are profitable, they need to be taxed as soon as possible. It should be borne in mind that according to international financial reporting standards, the growth of cryptocurrencies is classified as other income. There is practically no significant difference between income from cryptocurrencies and equity capital. Therefore, the topic of tax deductions will be raised more than once in the future. ”
Many experts question whether it is possible to trace peer-to-peer (P2P) transactions, which brokers successfully use to make illegal international transactions with cryptocurrencies. Recently, Finance Minister Hong Nam-ki announced that South Korea will tighten measures to combat tax evasion on cryptocurrency income.
As a reminder, South Korea began drafting a law on taxation of income from cryptocurrencies in 2020 and planned to implement it in 2021. But the South Korean National Assembly Committee has proposed postponing the introduction of a tax on income from cryptocurrencies until January 2022.
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