South Korea will reportedly charge 20% tax on cryptocurrency mining activities

Ministry of Strategy and Finance of South Korea believes that part of the tax should be deducted from the mining income of cryptocurrency “miners” in order to be socially responsible. The official believes that a 20% tax should be levied on those with an annual mining income of more than US$2,220, and related policies should be implemented from January next year.

In addition, South Korean digital asset miners should submit a tax return in May each year, detailing the total value of the virtual currency mined in the previous fiscal year in Korean won.

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In March of this year, according to the revised Financial Transaction Reporting Act, virtual asset service providers must undergo compliance inspections, verify customer identities, and submit suspicious transaction reports to the Korea Financial Intelligence Agency, and Report to the Financial Services Commission.

The Financial Transaction Reporting Act provides a 6-month grace period for companies engaged in cryptocurrency-related services, during which they are required to complete rectification.

In the first quarter of this year, among the 2.5 million investors who opened new accounts on the four major virtual currency exchanges in South Korea, 67% of them were in their 20s and 30s. In the environment of high housing prices and difficult employment in South Korea, trying to obtain high profits in a short period of time through virtual currency transactions has become the main reason for them to take risks.