South Korea tax encrypted currency exchange tax up to 24.2%

According to the South Korea media reports, the South Korean government said on Monday that it will impose a 24.2% corporate and local income tax on the Korean virtual currency exchange this year, starting this year.

South Korea is Asia’s fourth-largest economy. Virtual currency transactions are prevalent in South Korea. The government is trying to control it. It has also considered banning virtual currency transactions by legislation. Due to fears of a bubble, last month, the South Korean government banned the opening of new accounts. South Korea also demanded that virtual currency traders change their virtual account names and promote a real-name system.

Bitcoin, Ethereum, and other virtual currencies have gained popularity in South Korea in recent months as South Korean investors want to make quick money through deals. Globally, South Korea is also one of the largest private Bitcoin markets, and it is estimated that about 2 million South Koreans have “well-known” digital currencies.

According to current laws and regulations, an enterprise earns 22% corporate income tax and 2.2% local income tax if its income exceeds 20 billion won (18.7 million U.S. dollars). An official at the Ministry of Strategy and Finance in South Korea said virtual currency exchanges must pay corporate income tax by the end of March and local income tax by the end of April.

Bithumb is one of the largest virtual currency exchanges in Korea. Yujin Investment Securities estimates that Bithumb’s profit last year was estimated to be 317.6 billion won (about 297 million U.S. dollars). It paid 60 billion won (about 56 million U.S. dollars) of corporate income tax and local income tax. In the first seven months of last year, Bithumb made a profit of 49.23 billion won (about 46 million U.S. dollars) with a revenue of 492.7 billion won.

Reference: Yonhap news