South Korea's National Tax Service Launches Tax on Crypto Futures and Inheritance Tokens

South Korea's tax plan for the cryptocurrency market has been brewing for a long time.

According to a recent report from KBS, the National Tax Service plans to start taxing cryptocurrency gifts and heirloom tokens. Although this may seem like a difficult way to pay taxes on a legal document. The National Tax Service (NTS) has announced that from January 2022, citizens will be required to pay taxes on cryptocurrencies for free or acquired by family and acquaintances.

At the National Assembly meeting in December this year, Korean lawmakers postponed the property tax plan until 2023. However, that was not the case. protect the South Korean tax authorities by making plans to tax future cryptocurrency and heirloom tokens.

Korea's tax plan, which is expected to take effect in 2023, generates a 20% tax on cryptocurrency income exceeding 2.5 million won per year.

Meanwhile, South Korean tax authorities have announced that they will be adding new tools to their website to help them fulfill their new right of crypto gifts and inheritance. These tools allow you to calculate the taxes that a person would have to pay if they had the time with cryptocurrencies.

These tools use price data provided by the "Big 4" cryptocurrency exchanges of Upbit, Bithumb, Korbit, and Coinone. However, citizens should use a device that generates an average two-month fee instead of using the cryptocurrency rate used for heirlooms or tokens. NTS appears to be concerned about the movement of price tokens, and smart traders can look to the future to avoid the impact of large taxes when prices fall. The IRS does not specify when the two-month average rate is required, but the period must be paid six months before receipt and 30 to 31 days after.

It is worth noting that the South Korean government still hopes to crack down on the cryptocurrency market. Last month, the Korea Financial Services Regulatory Commission (FSS) started to think about cryptocurrency-related bills, but this is the first time that regulators have announced a cryptocurrency-related bill. Going forward, anyone who manages market value or derives unfair profits from cryptocurrency activity using undeclared information will be prosecuted for at least one year in prison and at least three times fined. Additionally, cryptocurrency advocates are required to post free brochures, legal considerations, and marketing campaigns for users, and any breach of this obligation will result in criminal prosecution.

The industry predicts that when the “Cryptocurrency Bill of Rights” is announced at that time, virtual currencies will be included in regulatory measures such as financial transactions and insurance markets.