Home News South Korean Bitcoin miners can deduct electricity costs from tax filings

South Korean Bitcoin miners can deduct electricity costs from tax filings

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From 2022, in South Korea, profits from cryptocurrency transactions above 2.5 million Korean won ($ 2.2K) per year will be taxed at 20% on capital gains, Pulse reports.

Also, investors will be able to receive a tax deduction for expenses incurred as a result of mining cryptocurrency. At the same time, miners need to prove how much electricity they use in their activities. The South Korean Ministry of Economy and Finance noted that the amount of tax that cryptocurrency investors will pay next year will be minimal. Despite the record high growth in the value of digital coins this year.

According to The Korea Herald, an earlier survey conducted in South Korea, according to which more than half of the country’s population approved the taxation of cryptocurrencies. The largest percentage of opponents of the introduction of a tax on cryptocurrencies was in the age group 20-29 (the most active users of digital assets).

The initiative to tax cryptocurrencies launched by the South Korean ministry back in October 2020. And in March, cryptocurrency trading was completely legalized in the country.

Bitcoin prospects in South Korea

South Korea as a whole is a very specific region where cryptocurrencies can reach off scale levels. And changes in tax legislation only accompany this.

Note also that the cost of Bitcoin on the South Korean crypto exchanges is slightly above the average market price. The Bitcoin surcharge in South Korea can be explained by the fact that it is an extremely developed country with an innovative economy. Many miners are located here, despite high electricity prices.

Moreover, miners must use a range of computer systems and specialized machines around the clock to process a bizarre sequence of algorithms, which leads to huge electricity bills.

But as we can see, tax policy has changed for the better, miners say. Any bills related to mining actions will be deductible.

Conclusion

Perhaps in the future, the country will decide to completely abolish the taxation of crypto.

So in many developed countries, regardless of what type of asset cryptocurrencies considered, they decided to exclude VAT and sales tax.

At the same time, taxes of the following types remain: capital gains, corporate tax, personal income tax, etc. In some countries, they collected in full, in others – partially or under certain conditions.

Thus, the question remains open, at least because the direction of cryptocurrencies itself continues to develop.

Despite all the inhibition of the bureaucratic apparatus in any country, the authorities are gradually following the rapidly developing asset.

Back in April, South Korean Prime Minister candidate Kim Boo-kyum pledged to look into the cryptocurrency tax law. Amid ongoing criticism from stakeholders interested in cryptocurrency in the country.

It is an extremely gambling nation, with South Korean players at the forefront of esports. In addition, the country was in the leading positions in the formation of the cryptocurrency market.

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