South Korea’s government is considering a proposal to levy a 20 percent tax on cryptocurrency transactions.
The Ministry of Finance has ordered its income department to review the draft law.
The gains made through cryptocurrency transactions are expected to be reclassified as ‘other income’ and not ‘capital gains’.
Cryptocurrency regulations were developed significantly since the National Policy Committee has unveiled the cryptocurrency taxation policy in 2017.
Under the proposed law, a 20 percent tax will be levied on 40 percent of the total other income, while the remaining 60 percent will not be subject to tax.
“The finance ministry is yet to finalize its direction but it surely has become more likely for the income from virtual asset trading to be labelled as other income, not as gains from transfer of capitals like real estate properties,” said an official source.
It was earlier reported that South Korea is actively preparing for the possibility of launching a state-backed cryptocurrency.
The country seeks to join Japan, Russia, Iran, China, and other countries in the crypto marathon.