Virtual Asset Taxation: No Impact on Year-End Settlement

IconCryptoNewsTerminal Staff05 Jul, 2024

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Virtual Asset Taxation: No Impact on Year-End Settlement

Virtual asset (cryptocurrency) taxation, scheduled to commence on January 1, 2023, will not negatively affect year-end settlement processes like personal exemption benefits or health insurance premiums, according to a report by The Korea Economic Daily. The National Tax Service has clarified that "virtual asset transaction income is subject to separate taxation and does not impact personal exemptions received during year-end adjustments." This means that virtual asset income will not increase tax burdens or result in the loss of personal exemption benefits. Concerns had been raised that individuals receiving personal exemptions, such as spouses or dependents, might lose tax reduction benefits if they earned over 1 million won annually through virtual asset investments. However, virtual asset investment income is excluded from the personal exemption calculation criteria as it falls under "other income subject to separate taxation." This tax treatment ensures that virtual asset taxation does not disrupt year-end settlement procedures and provides clarity for taxpayers. It also highlights the government's commitment to a clear and equitable tax system for virtual assets.

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