South Korea’s finance department on Wednesday announced a new rule imposing a 20% capital gains tax on cryptocurrency transaction gains starting in 2022. However, cryptocurrency investors are entitled to a tax deduction for expenses incurred during mining.
The country’s Ministry of Economy and Finance explained cryptocurrency transaction gains exceeding 2.5 million won (about US$2,230) would be slapped with a 20% tax starting January 1, 2022. However, the investors can deduct expenses from their mining operations, the ministry added.
According to the ministry, the new tax will be applied to gains or losses incurred next year, so surging crypto prices from 2021 should not affect traders too severely. A recent survey in Seoul showed almost 54% of South Koreans favor taxing cryptocurrency gains. The poll also indicated that the younger generation is opposed to taxing their digital currency activities.
As Forkast.News reported, some view the plan as biased and unfair, going so far as to sign petitions asking for the resignation of state officials.
South Korea has been planning on issuing new regulations on cryptocurrency trading and taxation on profits, but the breakout of the global Covid-19 pandemic is said to have delayed the implementation.