Transfer tax of 20% from next year for cryptocurrency…Responsiveness to’stock and tax discrimination’

From next year, taxes will be levied on income generated from transactions with cryptocurrencies (virtual currency) such as bitcoin.

On the 22nd, the Ministry of Strategy and Finance announced that from 2022, income generated from the transfer or lending of virtual assets will be classified as other income and taxed separately at a tax rate of 20%.

When you inherit or donate virtual assets without selling them, you also have to pay taxes.

However, it is difficult to use foreign exchanges or to confirm transactions between individuals, so there are doubts about the effectiveness and some voices say that taxation’discrimination’ from stocks.

The basic deduction for the virtual currency transfer tax is 2.5 million won. In other words, from next year, cryptocurrency investors will be levied a 20% tax on profits exceeding 2.5 million won.

Those who made a 10 million won margin with bitcoin next year will have to pay 1.5 million won, 20% of the remaining 7.5 million won, as tax after subtracting 2.5 million won.

This is calculated excluding transaction fees, and the actual tax is charged on the net income amount (total income-necessary expenses) minus necessary expenses such as transaction fees from the total income.

However, in the case of currently held virtual currency, tax is not levied on the price increase before taxation.

Domestic residents are required to report their income for the previous year in May each year and pay taxes.

In addition, taxes are levied on inheriting or giving virtual currency.

The taxable base price is calculated as the average of the daily average price for one month before and after the date of inheritance and donation.

Some point out that this taxation is different from the transfer tax on financial investment income such as stocks.

On the 10th, a petition titled’Do not discriminate against taxing more than 2.5 million won for bitcoin and 50 million won for taxable stocks’ was posted on the Blue House National Petition Bulletin.

The author of the article said, “From 2023, if stock investment income exceeds 50 million won, 20% taxation is imposed. Why is bitcoin (virtual asset) taxed 20% if it exceeds 2.5 million won?” I would like to ask if there is any discrimination in paying.”

As of 3 pm on the 22nd, the petition exceeded 38,000 people who agreed.

In response, the Ministry of Strategy and Finance said that “the basic deduction and equity for capital gains for other assets in general were matched.”

The Ministry of Strategy and Finance said at a briefing session on the amendment to the tax law last year, saying, “Major countries such as the United States, Japan and the United Kingdom are also taxing, and taxation taking into account equity with other income such as stocks and derivatives,” and “considering international accounting standards and domestic legal systems.”

On the other hand, there are also questions about the effectiveness of this taxation.

It is pointed out that there is virtually no way to check if investors use foreign exchanges to avoid domestic exchanges or trade between individuals.

In addition, there are voices in the domestic cryptocurrency community, etc., urging for prompt institutionalization, saying, “There is no legislation related to investor protection, although tax will be raised.”

In fact, the domestic law has not yet established a legal basis for preventing or punishing unfair trade activities such as manipulating the market price of virtual asset providers, speculating virtual currency, and setting excessive fees.

In response, on the 27th, Congressman Lee Ju-hwan of the People’s Power of the People’s Power proposed an amendment to the’Act on Reporting and Use of Specific Financial Transaction Information (Special Law).

The amendment imposed the prohibition on unfair trade activities such as market price manipulation and the obligation to prevent illegal leakage of virtual assets on virtual asset business operators, and stipulated matters on penalties and fines, including liability for damages caused by illegal acts.

Virtual currency is receiving a lot of attention as its liquidity has increased after the novel coronavirus infection (Corona 19).

Bitcoin’s price has been on the rise since it surpassed 30 million won in domestic transactions for the first time in December of last year.

In particular, when the New York Melon Bank of the United States decided to deal with the bitcoin business this year, and Elon Musk Tesla’s chief executive officer (CEO) revealed that it has invested $1.5 billion in bitcoin, the price of bitcoin exceeded 50 million won per piece on the 9th. Stood.