South Korea Delays Levying 20 Percent Crypto Tax By Three Years

Seoul has decided that taxation on income from virtual assets will be delayed till 2025.

By Radhika Parashar | Updated: 21 July 2022 18:10 IST

South Korea Delays Levying 20 Percent Crypto Tax By Three Years

Photo Credit: Unsplash/ Daniel Bernard

Nearly six million residents of South Korea held crypto by 2021

Highlights

South Korea had initially decided to tax crypto incomes in 2023
South Korea is investing heavily in metaverse
Crypto industry is booming in South Korea

The government of South Korea is seemingly taking a calculative approach towards the crypto industry, ensuring not to pressurise it in its current nascent stage. The Asian nation has decided to delay the imposition of a 20 percent tax on crypto earnings till 2025, unlike India, that enforced a costlier tax regime on virtual digital assets (VDAs) earlier this year. The development comes at a time when several nations from around the world are consulting the public and financial authorities in order to formulate crypto rules that ensure the safety of their investors, as well as their respective existing financial systems.

South Korea announced its 2022 tax reform plan on Thursday, July 21, in which the authorities said that taxation on income from virtual assets as well as income from the "transfer or lending of virtual assets" will be delayed by three years.

While Seoul is taxing not all crypto incomes for now, its initial plan to levy a 20 percent tax on yearly crypto gains exceeding $1,900 (roughly Rs. 1.50 lakh) remains unchanged, a CoinDesk report noted.

Crypto Lender Vauld Applies for Protection Against Creditors

Meanwhile, in India, crypto traders are struggling to see profits after paying a 30 percent tax on transactions of VDAs. This rule went live in April.

Starting this month, Indians have also begun to see one percent tax deductions on each crypto transaction. This essentially means that one percent TDS is being levied on every purchase and deposit of crypto assets, thus increasing the pressure on investors.

South Korea is however, not looking to pull public interest away from the crypto industry.

Scam Crypto Sites to Be Automatically Taken Down in Australia

The crypto market in South Korea touched the valuation of $46 billion (roughly Rs. 3,66,318 crore) by the end of 2021, with the number of users reaching nearly 5.58 million or around 10 percent of the country's population, as per a study by South Korea's Financial Service Commission.

Its largest network provider, SK Telecom is currently creating a crypto wallet, powered by advanced Web3 capabilities.

Not just the crypto industry, but the Asian tech hub is also exploring ventures in the metaverse industry.

The government of South Korea is planning to invest over $177 million (roughly Rs. 1,372 crore) in supporting metaverse projects that will also trigger job opportunities in the sector. The country is betting on the “indefinite potential”, it believes, the metaverse industry holds.

In fact, in a bid to safeguard its crypto investors against industry mishaps and scams, South Korea's Financial Supervisory Service (FSS) has decided to take on the mantle of analysing the risk characteristics of domestic virtual assets as a way to manage risks in the virtual asset market.

The FSS plans to entrust research services to institutions with public trust in order to analyse the risk characteristics of domestic virtual assets.

Why is Oppo making strange choices with its flagship Reno series? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Cryptocurrency, South Korea, Crypto Tax

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More