South Korea aims at introducing a capital gain on crypto assets that could be as high as 20% as the National Assembly looks at virtual assets as goods rather than currency.
In a local report by Newsway, the National Assembly proposed a bill to impose taxes on cryptocurrency assets including a 20% capital gains tax on the transfer of virtual assets. Following the tabling of the bill, the representatives in the N.A. are expected to start digging into the economic prospects and value that these digital assets hold.
The bill, proposed by Democratic Party rep, Yang Kyung-sook, aims at recognizing virtual assets as goods rather than currencies hence the implications of the tax. The lawmakers term virtual assets as “electronic certificates of economic value that can be traded or transferred electronically”.
Bitcoin as a property value
In 2019, a South Korean court judged that Bitcoin (BTC) and crypto-assets of similar stature holds a “property value” as investors increasingly use them as goods rather than currencies. The judgment read,
“Considering various conditions, such as the recognition of intangible assets with property value, the necessity of taxation and the recognition of the property value of virtual assets are being raised at the same time.”
Taxation of crypto assets is already active in other states such as Japan and the United States.
A blooming revenue market for South Korea
Taxing crypto assets is expected to increase the country’s revenue substantially. According to the Financial Services Commission in South Korea, over 1.5 billion trades have been conducted on the top exchanges in the country since January 2015 with an average daily transaction amount of 1.93 billion won ($1.57 billion).
So far since 2015, over $1.7 trillion dollars has been transacted in South Korean exchanges such as Bithumb, Upbit, Corbit, and CoinOne.