Residents of South Korea are required to report their assets on overseas cryptocurrency exchanges as part of compliance with tax law. Forkast reports, citing the relevant agency.
According to the publication, citizens will pay tax on digital assets if their total amount at month-end exceeds 500 million won ($450,000). The new rule will take effect on January 1, 2022, and taxpayers must file their declarations by June 2023.
Penalties for violators range from 10% to 20% of the undisclosed or undervalued amount. If it exceeds 5 billion won ($4.5 million), criminal liability is possible.
From 2022, Korea will also introduce a 20% tax on profits from cryptocurrency trading on amounts exceeding 2.5 million won (approximately $2,230).
Similar rules will apply to inheritance or gifts of digital assets.
Until September 2021, South Korean cryptocurrency exchanges were required to complete KYC procedures under the Special Payments Act. It also envisages a ban on anonymous cryptocurrencies.
According to local media, one in four South Korean students invests in Bitcoin. In April, some employers noted that their employees aged 20 to 30 are distracted by monitoring the price fluctuations of the first cryptocurrency or quit their jobs to devote themselves entirely to trading.
As noted, in the first quarter of 2021, South Korean banks processed 64.2 trillion won ($57.9 billion) in transactions on verified accounts linked to cryptocurrency exchanges, exceeding the full-year 2020 total.
Subscribe to ForkLog news on VK!