Korea proposes 20% tax on crypto trading starting 2021

[ecnalubma]

Their argument is that stock market gains carry a minimum threshold of about $16.5k while the proposed minimum threshold for cryptocurrency trading is only about $2k. Furthermore, the stock market tax will be applied in 2023 whereas the crypto tax would start next year if passed.

Seems the South Korean investors are not happy with it, but $2k minimum to get taxed  is really low threshold. Well atleast if they can adjust it to $10k atleast but it is up to Korean regulators on how they implement the matter.

[tippytoes]

It's very high! 20% tax on crypto trading will hurt a trader even if Korea will use it to help their economic status.  It means the 20%tax will less to your total asset everytime you're going to cash out. It's not good because you will fee a high amount for transaction then additional fee for tax. Very difficult to the part of trader.

Maybe they can still lobby to decrease the percentage of tax here as it is only proposed at the moment. Really not favourable to their traders. A lot of us are still enjoying  free tax but seems that S. Korea is fast tracking about this regulation. I hope they can reduce the number here because this may give them the reason not to use crypto.

[iv4n]

Their argument is that stock market gains carry a minimum threshold of about $16.5k while the proposed minimum threshold for cryptocurrency trading is only about $2k. Furthermore, the stock market tax will be applied in 2023 whereas the crypto tax would start next year if passed.

Seems the South Korean investors are not happy with it, but $2k minimum to get taxed  is really low threshold. Well atleast if they can adjust it to $10k atleast but it is up to Korean regulators on how they implement the matter.

Well $2k minimum to get taxed is not so low, at least not for many people who live in the countries with much lower paychecks, but I understand that $2k for some people is extremely low.  Anyway we can't do much about this, when government made its mind it's what it is, you can choose to obey or you can choose to skip few regulations and find a way to trade anonymously.
It's interesting to watch S. Korea crypto steps, they are pioneers, they are doing some things for the first time and it will be a good example for others!

[bryant.coleman]

Well $2k minimum to get taxed is not so low, at least not for many people who live in the countries with much lower paychecks, but I understand that $2k for some people is extremely low.  Anyway we can't do much about this, when government made its mind it's what it is, you can choose to obey or you can choose to skip few regulations and find a way to trade anonymously.
It's interesting to watch S. Korea crypto steps, they are pioneers, they are doing some things for the first time and it will be a good example for others!

It is not an extremely low amount in any country.

$2K is a month's average salary (after tax deduction) in countries such as the United States and Canada. And in South Korea, with $2K you can pay rent for 4-5 months in a city such as Busan or Seoul. Those who want to complain are going to do that. But in my opinion, this is a very good deal for cryptocurrency users in South Korea, especially if you are considering cryptocurrency trading as a part-time profession.

[Reatim]

It's been a long time coming but it looks like they're finally here. Crypto taxes in South Korea.
Took them long enough. Honestly they don't look that bad. it's better than the capital gains threat that was being thrown around for a while.
20% on gains, minimum threshold is $2k/year, filed under income tax, starting October 2021.

https://thenews.asia/korean-crypto-tax-amendment-sent-for-review/

Thats far high having 20% taxation for every gain cryptonians has?

I believe that this will never be go straight because how can every investors gain when they will be required with 20% high taxing?

And also they must strengthen Laws against  crypto scammer  because they sentenced this one with almost 3 years penalty taking more than 240 million dollars  from the people?

https://cointelegraph.com/news/crypto-scammer-sentenced-by-south-korean-authorities


If people saw their safeties in investing here in crypto?then they may be supported towards taxation that they are asking for.

[South Park]

Oh well I guess we need not fear South Korea ever taking over world commerce to any extent if this is their understanding of free trade.   Restricting and removing 20% of a global economic trade every time it goes near your country is a sure way to avert that revenue stream from interaction within your national boundaries.   Its really a negative and poor understanding of how a society gains from capitalism and free exchange of value, good, ideas and services.    All of which are disenabled by the great clodding speedbump the government is putting in the way.
   Nobody is going to benefit from this tax, its nonsense just like all the people who believe a country can balance its budget with 90% taxes on the rich.   You are just helping every tax free haven to gain the benefit from those resources and people elsewhere.   Any law in any country has to be competitive or it will just hand the business onto a better system.   Korea does alot of things great, they are pretty lost to even consider this imo but doubt they listen.

Agreed, if this was a small tax like 5% or lower then many traders and investors could overlook it and just keep trading as usual but a tax of 20% on capital gains is simply going to make many traders and investors unprofitable so even if they do not want they will have to trade in another exchange not subject to the South Korean laws, then there are all of those that will move on just on principle and it is easy to see how the volume in those exchanges will go down, and this will only help the jurisdictions that have very low or no taxes and bring no benefit to South Korea.

[FanEagle]

20% is not that high depending on how much you think your country is actually helping you out with the taxes they are charging you. For example the taxes in Scandinavian countries are quite high as well, yet when you pay that, you know the government is looking after you as well, they are using all of that taxes to make sure that you are living a great life, and they will pay your health, your school, your retirement, basically you are all taken care of and have a decent life forever thanks to the taxes you pay. On contrary look at USA, you pay taxes, and government shoots you.

So, basically 20% on Korea might be good, might be much, might be little, it all depends on what Koreans think about their government, if they like it they will say it is fine, if they don't they will say it is a lot, it is a thing only a Korean can answer (or anyone who lives in Korea).

[chip1994]

It's been a long time coming but it looks like they're finally here. Crypto taxes in South Korea.
Took them long enough. Honestly they don't look that bad. it's better than the capital gains threat that was being thrown around for a while.
20% on gains, minimum threshold is $2k/year, filed under income tax, starting October 2021.

https://thenews.asia/korean-crypto-tax-amendment-sent-for-review/

20% is too high for technology businesses now. This seems to be a ban for crypto businesses and startups in Korea. It seems that they are quite negative about crypto and do not want their people to participate in this decentralized market. This will cause a lot of difficulties for Korean businesses, maybe all will have to move to other countries to work.

[South Park]

20% is not that high depending on how much you think your country is actually helping you out with the taxes they are charging you. For example the taxes in Scandinavian countries are quite high as well, yet when you pay that, you know the government is looking after you as well, they are using all of that taxes to make sure that you are living a great life, and they will pay your health, your school, your retirement, basically you are all taken care of and have a decent life forever thanks to the taxes you pay. On contrary look at USA, you pay taxes, and government shoots you.

So, basically 20% on Korea might be good, might be much, might be little, it all depends on what Koreans think about their government, if they like it they will say it is fine, if they don't they will say it is a lot, it is a thing only a Korean can answer (or anyone who lives in Korea).

You raise a fair point however I still think 20% is excessive, traders already have to pay a lot of money, like paying for the spread, paying commissions for each trade you make, paying for the transactions in an out the exchange, if you add a tax of 20% on your capital gains then many traders will simply become unprofitable and they will have to either forget about trading or move to another jurisdiction, and those that have a lot of money will surely move out and the South Korean government will not get anything remotely to what they were expecting with this new law.

[pixie85]

This is as good as it can get. The proposed 20% tax rate is much lower, when compared to the same for the other countries. On top of that, small-scale traders who earn profits up to $2,000 per year doesn't have to pay any tax. This has to be one of the most encouraging news to appear here since the start of this year. But then, I hope that this law won't be changed further, because South Korean government has a habit of backtracking on their promises.

What "other countries"? Germany and many other countries have 0% tax.

20% is quite high. In many countries a total income tax is about 18% so trading is taxed more in Korea than any other job in canada where you have 15% tax up to 47 thousand dollars a year.

[abel1337]

Damn 20% is a bit high considering that the trader needs to pay other fees like transaction fees and platform fees. This can discourage traders from South Korea to trade cryptocurrency since a high percentage of tax is blocking their way toward the profit. Some cryptocurrency trader will be forced to switch into stock trading when this tax is applied to them. Crypto traders will be slap hard if this kind of tax implement in every country and becomes the standard.

[tyz]

It's been a long time coming but it looks like they're finally here. Crypto taxes in South Korea.

Much better than in Germany, where you have to pay up to 45% on crypto gains if you buy and sell a crypto asset within a year However, if you hold it longer than a year all gains are tax-free. For short-term trades, I think the South Korean approach is much better by simply taxing all profits at 20%.

[Mahanton]

Damn 20% is a bit high considering that the trader needs to pay other fees like transaction fees and platform fees. This can discourage traders from South Korea to trade cryptocurrency since a high percentage of tax is blocking their way toward the profit. Some cryptocurrency trader will be forced to switch into stock trading when this tax is applied to them. Crypto traders will be slap hard if this kind of tax implement in every country and becomes the standard.

There would be no other options but to switch up into those traditional markets and avoid those ridiculous high tax percentage.I didnt expect that Korean Government would impose such high fees
on crypto trading and as you said where this one still do exclude trading fees and other things which would really be a big burden.If some traders would like to agree on said terms then
its their own choice but it is just really too much.Do they do have the chance to file up some petitions to make it lower?

[joinfree]

No offence but this is way to much. I mean 20% is huge compared to the average traders not the institutions and over the counter point of sales outlets. I think they should really be clear about this tax system as it is not fair. Moreover, i am just hoping to see crypto being used in real world, that way there will not be much need for all these cash out which bring about taxation.

[exstasie]

Damn 20% is a bit high considering that the trader needs to pay other fees like transaction fees and platform fees.

Not sure about South Korea specifically, but fees associated with trading and investment are usually tax deductible. If you're a high volume trader, that definitely eases some of the pain.

What "other countries"? Germany and many other countries have 0% tax.

20% is quite high. In many countries a total income tax is about 18% so trading is taxed more in Korea than any other job in canada where you have 15% tax up to 47 thousand dollars a year.

Germany only has 0% on long term (1+ year) gains. That doesn't really apply to traders. Otherwise it's a flat 25% + 5.5% solidarity surcharge.

In Canada, 50% of your capital gains are taxable. In the US, it's up to 37% on short term gains.

I would absolutely love to be getting taxed at 20%.....

[TitanGEL]

No offence but this is way to much. I mean 20% is huge compared to the average traders not the institutions and over the counter point of sales outlets. I think they should really be clear about this tax system as it is not fair. Moreover, i am just hoping to see crypto being used in real world, that way there will not be much need for all these cash out which bring about taxation.

That is really huge tax. If I'm one of the citizens of the Korea, I do not know if I will still continue to trade cryptocurrencies because for me it is lose lose situation. It is better to trade forex or even stocks because of its low tax. I never thought that a cryptocurrencies trading will be tax by the government, we are now used to pay commissions in different exchanges and it is not big as like that. It is really a pain in the ass for a certain out there especially or those short term traders.

[michellee]

No offence but this is way to much. I mean 20% is huge compared to the average traders not the institutions and over the counter point of sales outlets. I think they should really be clear about this tax system as it is not fair. Moreover, i am just hoping to see crypto being used in real world, that way there will not be much need for all these cash out which bring about taxation.

That is really huge tax. If I'm one of the citizens of the Korea, I do not know if I will still continue to trade cryptocurrencies because for me it is lose lose situation. It is better to trade forex or even stocks because of its low tax. I never thought that a cryptocurrencies trading will be tax by the government, we are now used to pay commissions in different exchanges and it is not big as like that. It is really a pain in the ass for a certain out there especially or those short term traders.

I think the tax will be applied when the crypto users send the money from the exchanges to their bank account because if the government applied that in the exchanges, that will cost a big fee for the traders because they need to pay an extra fee in the exchanges. Or maybe the tax will be applied to the traders who can earn some percentage of the profit.

[bits4books]

Amazing! The state integrates cryptocurrency into the economy but everyone is dissatisfied with this because now it necessary to pay taxes!
And they do not want to accept the fact that this is a kind of contract price
I think this is a fairly simple rule that has been working for a very long time - if you want to do [something] with [something] in the country, then you will have to pay for it in the country itself. At least in exchange for protection. I do not see anything wrong with this, given that the crypto is really now not a coin and more fin tool.

[kotajikikox]

Korea is fast growing economy with this taxation is very important in  their part so if they can at least consider what is appropriate for every crypto investors i believe this is what they must consider.
but knowing them?i see no big deal for this taxation.

20% is big but considering crypto market is volatile then chances of gaining is there.the only problem i see here is how can they implement this?while this is decentralized market?
but anyway wish they will come to the agreement in which both party's will agree.

[Nhor1011]

I think Korea will put taxes through crypto exchanges. So it means every Korean crypto exchange will required KYC and that will be the basis of Korean government because they can't put taxes to individual person because cryptocurrency is decentralized and government has no control on it. It means there is a transparency between the Korean government and to all crypto exchanges on their country.