Cryptocurrency investors are required to pay tax at a 20% tax rate on profits exceeding 2.5 million won starting next year.
According to the Ministry of Strategy and Finance, from next year, the government will classify income generated by transferring or lending virtual assets as other income and tax it separately at a tax rate of 20%. The basic deduction amount is 2.5 million won.
For example, a person who made a profit of 10 million won with bitcoin next year must subtract 2.5 million won from the profit and pay 1.5 million won, 20% of the remaining 7.5 million won in tax.
However, this is calculated excluding transaction fees, and the actual tax is charged on the net income amount (total income-necessary expenses) minus the necessary expenses such as asset acquisition value and transaction fee from the total income.
When calculating the necessary expenses, the first-in-first-out method, which is regarded as sequentially transferred from the assets purchased first, is applied.
For example, suppose an investor bought a virtual asset for KRW 1 million, KRW 1.5 million, and KRW 2 million in installments and then sold one for 5 million KRW.
At this time, the asset acquisition value is calculated as the first amount acquired, KRW 1 million.
In this case, the investor is considered to have earned a net income of 4 million won (excluding transaction fees) by subtracting the asset acquisition price of 1 million won from the income amount of 5 million won. Will be given.
If the asset is then sold again, this time, 1.5 million won is regarded as the acquisition amount.
In the case of currently held virtual assets, tax is not levied on the price increase before taxation is enforced.
To this end, the government introduced an agenda acquisition price, allowing investors to pay taxes on the better side of the actual acquisition price or the market price at the end of this year.
For example, if the actual acquisition price of a virtual asset held by an investor is 50 million won and the market price at the end of this year is 100 million won, it means that it will be regarded as acquiring the asset at 100 million won.
Conversely, if the market price of the asset is 30 million won as of the end of this year, it is taxed based on the actual acquisition price of 50 million won.
The market price at the end of this year is calculated as the average of the prices announced by the virtual asset providers announced by the Commissioner of the National Tax Service as of 0:00 on January 1 of next year.
Domestic residents must report their investment income for the previous year and pay taxes in May every year.
At this time, the total income and losses from various virtual assets for one year are added and tax is applied.
In addition, when a virtual asset is not sold and inherited or gifted, tax is also charged.
The taxable asset price is calculated as the average daily average price for one month before and after the date of inheritance and donation.
Immediately ahead of next year’s taxation, some virtual asset investors have voiced claiming tax discrimination against stocks.
In the case of virtual assets, the basic deduction amount is only 2.5 million won, whereas financial investment income such as stocks, which begins to be taxed from 2023, does not have to pay taxes up to 50 million won.
A petition titled “Do not discriminate against taxation of over 2.5 million won for bitcoins and over 50 million won for taxable stocks” was posted on the Blue House National Petition Bulletin, and as of 3 p.m. on the 21st, 38,000 people agreed.
(Photo = Yonhap News)