A new legislature passed in South Korea calls upon its citizens to report their cryptocurrency accounts overseas. According to the new decree, digital investors with reserves or returns higher than 500 million won or $418,935 are required to declare their assets with the financial regulatory agencies in South Korea.
The new amendment has been published by the Ministry of Economics and Finance in the New Year guidebook for investors. All the registered citizens in South Korea with 500 million won worth of cryptocurrencies dating at any day of the current year must register their particulars with the regional tax corporation and tax office director.
There are several reasons that the citizens in many parts of the world are resisting crypto regulations. One main reason among these is the imposition of taxes on ROI for cryptocurrency investors. For the citizens of South Korea, the rate of taxes on virtual income is set at 20%, for starters.
However, the tax imposition goes into effect next year due to the opposition by virtual currency holders and traders in the country. The cryptocurrency stakeholders claim that the government should not impose any taxes before providing the investors with an effective protective mechanism. Furthermore, the taxes on crypto returns are much higher than stock market gains.
The South Korean political parties, both ruling and opposition, have formed a united front against cryptocurrency regulations in the country. Meanwhile, investors in their 20s and 30s are also pushing for preventing the imposition of crypto taxes.
Cha Dong-jun is a professor of tax accounting at Kyunbok University. He recently claimed that the stance on cryptocurrency taxation could impact the upcoming presidential elections. Meanwhile, digital investors in Japan are already paying a 55% tax for returns above 40 million yen. Therefore, a considerable number of digital investors have dissolved their crypto reserves.