Korea to start taxing crypto donations and inheritances in 2022

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Korea’s National Tax Service has announced that donated or inherited crypto assets will be taxed under existing provisions, at a rate of between 10% and 50%, depending on their value.

Korea to tax crypto donations and inheritances

Korean citizens will have to pay a new crypto tax from 2022.

Local news agencies reported on Tuesday that Korea’s national tax service will levy a new crypto tax in 2022 targeting assets received as gifts or inheritances.

Under the new provisions, crypto donations and inheritances will be taxed in accordance with other donated or inherited assets at a rate between 10% and 50%, depending on their total value. The authorities say that the average daily price measured one month before and after the date of the transfer will be used to calculate the exact amount of tax payable.

The National Tax Service announcement listed four providers of virtual assets – Dunamu, Bithumb Korea, Korbit and Coinone – who will have to apply the new tax provisions over the next year.

This year, crypto regulations in Korea have tightened, but not without a setback. In early December, lawmakers voted to delay the introduction of a more general 20% tax on crypto gains above the threshold of KRW 2.5 million ($ 2,099). The tax on crypto gains is now expected to come into effect in 2023.

Elsewhere, Korean crypto exchanges are changing their policies to help them comply with new regulations regarding digital assets. Earlier this week, the country’s third-largest exchange, Coinone, announced plans to block withdrawals to unverified external wallets as part of its efforts to crack down on illegal crypto activity such as money laundering.

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies.

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