The South Korean finance minister said cryptocurrencies like Bitcoin will be taxed as “intangible assets”.
Amid growing opposition to the new cryptocurrency tax regime in South Korea, finance minister Hong Nam-ki confirmed that the government will begin taxing capital gains from crypto investment from next year.
Reuters reported on Tuesday,
It is inevitable that we will tax the earnings from trading virtual assets.
Hong stressed that cryptocurrencies such as Bitcoin (BTC) will be taxed as “intangible assets” and pointed out that seeing them as currencies is a “misunderstanding”. The minister also warned that crypto investments are vulnerable to new forms of illegal fundraising and fraud, and urged investors to be cautious when making investment choices.
As previously reported, South Korean lawmakers initially discussed a 20% capital gain to crypto investments in July 2020, suggesting that annual earnings over 2.5 million won ($ 2,200) would be taxable from October 2020. The South Korean government officially postponed a new tax regime on crypto earnings until 2022, and faced massive criticism and backlash from local crypto lobbyists over the proposed crypto tax.
Indeed, South Korean Prime Minister candidate Kim Boo-kyum recently promised to scrutinize the crypto tax regime to ensure that investors are treated fairly under the law.