S.Korea to charge 20% on crypto gains under new tax law

Lee Ji-hoon | AsiaToday
January 7, 2021
Starting 2023, South Korea will tax profits of over 50 million (approx $45000) won made from transactions of listed shares at 20%. The government will also charge 20% tax on benefits from buying and selling of cryptocurrency. If an existing single-home owner acquires the pre-completion apartment ownership after this month, he will be subject to transfer tax.
The Ministry of Economy and Finance announced Wednesday an amendment of enforcement decree following the 2020 revised taxation rules. After a legislative notice on Jan. 7-21, the enforcement decree amendment is scheduled to be promulgated and implemented in the following month after vice ministerial meetings and Cabinet meetings.
Under the amendment, all capital gains made from stock transactions will be classified as financial investment gains and face the renewed taxation rule starting 2023. Gains from transactions of listed shares and stock funds will face a 20% tax on anything earned over 50 million won. The rate will be 25 percent if profits from stocks are over 300 million won. An investor with an annual investment profit of over 50 million won must pay a transfer tax regardless of whether the investor is a major shareholder or not.
South Korea will continue to levy a capital gains tax on major shareholders who own stocks worth more than 1 billion won in a single company until the end of 2022. Stock holdings are calculated by summing up all the stocks of the major shareholder as well as spouse and direct relatives of the major shareholder.
A tax on profit from cryptocurrency investments will be introduced as well. An investor making an annual income of more than 2.5 million won from digital assets will be taxed at 20%. For digital assets owned prior to the start of taxation, the higher amount of either the market price or actual acquisition price at the end of this year will be regarded as the acquisition price.
The pre-completion apartment ownership will now be regarded as a house under the amendment. As a result, the heavy tax rate for multi-home owners will be applied to the pre-completion apartment ownership as well. However, if a single-home owner sells his house within three years of acquiring ownership of another pre-completion apartment, or moves into the new house within two years of completion, resides at the house for at least a year and sells his previous house, will be regarded as a temporary single-home owner.
Copyright @ Asia Today 2021
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