South Korea to tax 20% of crypto profits, deductible from mining costs
Cryptocurrency investors will face a 20% capital gains tax from next year in South Korea. (Pulse photo)
SEOUL: Cryptocurrency investors will face a 20% capital gains tax from next year in South Korea, but they are entitled to a tax deduction on expenses incurred during the processes mining such as utility bills.
The Economy and Finance Ministry said that earnings gains of more than $ 2.5 million on ($ 2,230) on virtual coin transactions will be taxed at the 20% rate starting in 2022, Impulse reported. But all expenses associated with mining activities may be deductible, he added.
Digital currency miners have to use multiple computers and dedicated machines around the clock to analyze a complex series of algorithms, resulting in massive electricity costs. The government has said it will recognize the bills as business expenses subject to a tax deduction.
A ministry official said investors living in the country must prove the share of their electricity bill related to mining activities to get a deduction when they report income from virtual currency transactions in May.
The ministry said the amount of tax cryptocurrency investors pay next year will be minimal despite the record surge in the value of digital coins like bitcoin this year, as taxation will be applied to gains or losses. to be incurred from next year.