South Korea 🇰🇷

The taxation of virtual assets is a significant aspect of the modern financial landscape, and various countries have introduced amendments to their tax laws to address the taxation of virtual assets. In Korea, the Income Tax Act has been revised to include specific provisions for the taxation of virtual assets. This includes determining taxable income, calculation methods for income from transfers and exchange transactions, and the applicable tax rate.

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• Taxable Income: Under the revised Income Tax Act in Korea, taxable income from virtual assets is generated through the transfer or lending of virtual assets as defined by the Special Act on Reporting and Utilization of Specific Financial Transaction Information. Certain types of virtual assets, such as those with restricted use, game products, prepaid electronic payment means, and electronic bills, are excluded from taxation.
• Calculation of Income: The income from transfers of virtual assets is calculated by subtracting the actual acquisition value and incidental expenses from the transfer/leasing price of the virtual asset. The acquisition value is evaluated using the moving average method for virtual assets traded through virtual asset operators and the first-in-first-out method for other cases. Virtual assets held before the enforcement of the law have a fictitious acquisition value based on the larger market price on the day before the enforcement date or the actual acquisition value.
• Market Price: The market price of virtual assets as of December 31, 2024, is determined differently based on the type of virtual asset. For virtual assets handled by city and city virtual asset operators, the average virtual asset prices announced by each operator on January 1, 2025, are considered. For other virtual assets, the prices announced by virtual asset operators (excluding city operators) on the same date are considered.
• Exchange Transactions: Income from the exchange of virtual assets is calculated by applying the exchange rate between the virtual asset subject to the transaction and the key virtual asset. The key virtual asset is the standard of exchange value, such as Bitcoin, Ethereum, or Tether. The value is determined based on the value at the time of the exchange transaction or the standard exchange rate under the Foreign Exchange Transactions Act for key virtual assets linked to foreign currency.
• Tax Calculation: The tax amount is calculated by subtracting necessary expenses, including incidental expenses, from the total income and applying a tax rate of 20%. A basic deduction of KRW, 2.5 million per year, is allowed.

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The revised Income Tax Act in Korea provides specific provisions for the taxation of virtual assets. Taxable income is determined based on the transfer or lending of virtual assets, and the calculation methods consider the acquisition value and incidental expenses. The market price of virtual assets as of December 31, 2024, is used for valuation purposes, and exchange transactions are assessed using the exchange rate with the key virtual asset. By understanding these key points, individuals and businesses involved in virtual asset transactions in Korea can fulfill their tax obligations and ensure compliance with the relevant tax laws.

https://nts.go.kr/nts/cm/cntnts/cntntsView.do?mi=40370&cntntsId=238935

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https://www.bbc.com/korean/news-56151765#:~:text=%EB%82%B4%EB%85%84%EB%B6%80%ED%84%B0%20%EB%B9%84%ED%8A%B8%EC%BD%94%EC%9D%B8%20%EB%93%B1,%EB%95%8C%EB%8F%84%20%EC%84%B8%EA%B8%88%EC%9D%84%20%EB%82%B4%EC%95%BC%20%ED%95%9C%EB%8B%A4.

The information provided in this collection of crypto country tax rates is intended for general informational purposes only. While every effort has been made to ensure the accuracy and completeness of the information, it should not be relied upon as legal or financial advice.

Tax laws and regulations are subject to change and can vary significantly from country to country, and even within different regions of the same country. The tax rates and guidelines mentioned in this collection may no longer be current or may not apply to your specific situation.

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