Under the new rules and laws of South Korea, all the people holding crypto assets in wallets/accounts outside South Korea will have to report to the tax authorities.
South Korea is a Crypto and blockchain-friendly country but rules and regulations in South Korea are very strict for the citizens & crypto companies. Korean lawmakers introduced several rules and guidelines for the crypto companies, so that no one company may facilitate any kind of illegal transactions in crypto or non-crypto in any of the ways.
The South Korean Ministry of Economy and Finance published a new guidebook for the citizens of South Korea. Under the new Guidebook rules, all the citizens or any type of organization or company will be forced to report about their crypto holdings and investment in the countries outside South Korea to the government.
This rule will apply to those individuals or companies, which are owning more than 500 million won of crypto assets in a year. That means people have the freedom to invest in overseas crypto accounts with a total of 500 million won in a year, without any tension or reporting needs.
These new Guidebook rules are just part of the new tax guidelines amendment of July 2022. And the next reporting date will be 1 June to 30 June 2023 to the tax authority.
According to officials’ statements, this new rule over the crypto investors is a part to bring better clarity in the overseas crypto investors of Korean citizens, so that tax departments can identify whether they are precisely imposing and collecting taxes or not. Because from next year, crypto investors will be subjected to 20% tax on their gains.
Crypto tax bill delays
The amendment of 20% crypto tax rules was ready to be introduced in 2021 and that was likely to take into effect by 1 January 2022 but that drafted bill failed to get introduced.
The majority of the reports, regarding this matter, claimed that South Korean Politicians are looking at the elections, and imposing high tax rules may ruin the vote percentage in the favour of ruling democratic parties.
However, on the other side, the Politicians statement claimed that there are more things needed to introduce and we are still in the initial phase of this crypto industry, which is very volatile and sensitive. So we need to wait for a better time to introduce an improvement in the bill.