Amid the growing opposition against the new cryptocurrency tax regime in South Korea, finance minister Hong Nam-ki confirmed that the government will start taxing capital gains from crypto trading starting next year.
“It’s inevitable, we will need to impose taxes on gains from trading of virtual assets,” the minister said when asked whether the tax should be delayed until the state has proper industry oversight in place, Reuters reports Tuesday.
Hong emphasized that cryptocurrencies like Bitcoin (BTC) will be taxed as “intangible assets”, noting that it was a “misunderstanding” to view them as currencies. The minister also warned that crypto trading is vulnerable to new forms of illegal fundraising and fraud, calling on investors to stay vigilant when making investment choices.
As previously reported, South Korean lawmakers initially discussed a 20% capital gains on crypto trading in July 2020, proposing that any annual gains of more than 2.5 million won ($2,200) would be subject to the tax starting October 2020. In late 2020, the South Korean government officially postponed a new tax regime on crypto gains until 2022, facing major criticism and pushback over the proposed crypto tax from local crypto lobbyists.
Indeed South Korea Prime Minister nominee Kim Boo-kyum recently promised to look into the crypto tax regime to make sure traders get fair treatment under the law.