The government of South Korea is considering classifying cryptocurrency as “other income,” which would subject crypto gains to a 20% tax rate.
According to a report by Korean news outlet Pulse News, "multiple" sources from the government on Monday indicated that the Ministry of Economy and Finance began reviewing taxation plans for cryptocurrency. Officials are considering classifying cryptocurrency as other income, putting crypto gains into the same category as lottery or prize winnings which constitutes a 20% tax rate.
Cryptoassets were previously under the property tax department, which oversees taxation on capital gains and gifts. According to the report, one government official said,
The finance ministry is yet to finalize its direction but it surely has become more likely for the income from virtual asset trading to be labeled as other income, not as gains from transfer of capitals like real estate properties.
Once classified as other income, Korean tax authorities would be able to impose an immediate tax on gains from crypto trading.
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