[Weekly Review] Taxation Applies When Earning Over 2.5 Million Won with Bitcoin... Major Shareholder Threshold Maintained at 1 Billion Won

All Stocks Held by Parties, Spouses, and Direct Lineal Relatives to Be Aggregated
Establishing a 500 Billion Won Venture Fund to Foster 'Future Cars, Semiconductors, and Bio' Sectors

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Starting next year, individuals who earn more than 2.5 million KRW annually from virtual assets such as Bitcoin will be required to pay taxes. A 20% tax rate will be applied to the amount exceeding 2.5 million KRW from the sale of virtual assets. The requirement for major shareholders' stock holdings subject to capital gains tax will remain at the current 1 billion KRW until the end of 2022.

◆Taxation on 'Bitcoin' transactions from next year= According to the Ministry of Economy and Finance on the 9th, the deemed acquisition cost used as the tax base will be considered as the market price of virtual assets as of December 31 this year. The market price is the average price announced by virtual asset operators, as notified by the National Tax Service Commissioner, based on the prices disclosed at 0:00 on January 1 next year.

Im Jae-hyun, head of the Tax Policy Division at the Ministry of Economy and Finance, explained, "From next year, if you earn more than 2.5 million KRW by selling or lending virtual assets, a 20% tax rate will be applied to the excess amount, which will be taxed separately as 'other income.' The taxable income is the amount after deducting necessary expenses (asset acquisition cost) from the revenue."

The current requirement for major shareholders' stock holdings subject to capital gains tax will remain at 1 billion KRW until the end of 2022. The stock holding amount is calculated by summing all stocks held by the shareholder, their spouse, and direct relatives (family aggregation).

◆Additional 500 billion KRW venture fund for future cars, semiconductors, and bio sectors= The government will additionally establish a 500 billion KRW venture fund this year to foster startups in the BIG3 sectors: future cars, bio-health, and semiconductors. As a follow-up project to the regulatory sandbox demonstrations in the BIG3 fields this year, the government plans to operate the ‘Special Zone Challenge’ program tailored to the demands of special zones and startup companies, providing a package of investment IR, technology development, and policy funds.

By industry, in the bio-health sector, the government will strengthen collaboration between large pharmaceutical companies, hospitals, and startups, while creating a bio-specialized complex for ventures and startups. The government plans to apply for a preliminary feasibility study in the first half of the year to build ‘Korea Hyun Lab Central,’ a cluster where not only ventures and startups but also large pharmaceutical companies, hospitals, and research institutes are concentrated.

In the future car sector, specialized support for autonomous driving startups will be enhanced. Specifically, spaces and facilities will be provided where the performance of sensors and other devices developed by autonomous driving startups can be tested and simulated. Additionally, autonomous driving data held by public institutions will be provided to startups to improve autonomous driving service performance. Furthermore, the open innovation collaboration system between global automakers and startups will be strengthened.

◆89 billion USD current account surplus in November last year... six consecutive months of surplus= According to the 'November 2020 Balance of Payments (provisional)' announced by the Bank of Korea on the 8th, the current account surplus in November last year was 8.97 billion USD. This surplus expanded compared to November last year (5.97 billion USD), continuing a trend of six consecutive months of increasing surplus compared to the same month of the previous year.

The goods balance recorded a surplus of 9.54 billion USD, an increase of 2.15 billion USD compared to the same month last year (7.39 billion USD). Exports amounted to 47.02 billion USD, up 1.1% from one year earlier (46.5 billion USD). The services balance showed a deficit of 720 million USD, with the deficit narrowing by 1.17 billion USD compared to the same month last year. The travel balance recorded a deficit of 500 million USD, reducing the deficit by 450 million USD compared to the same month last year. The transportation balance turned to a surplus compared to the same month last year. Although air passenger transport income decreased, transportation income centered on air cargo transport reached 2.36 billion USD.

Meanwhile, securities investment saw an increase of 9.41 billion USD in overseas investment by domestic investors and 4.32 billion USD in domestic investment by foreign investors. This marks eight consecutive months and six consecutive months of growth, respectively.

This content was produced with the assistance of AI translation services.