South Korean Bitcoin miners can deduct electricity costs from crypto tax filings
Crypto investors involved in cryptocurrency mining may enjoy a significant tax break when the country’s virtual currency tax regime commences in 2022.
According to a report by Pulse News, South Korea’s Ministry of Economy and Finance on Wednesday announced additional details of the country’s impending crypto tax law which included a provision for crypto miners to report operating expenses as tax deductibles.
These expenses cover electricity bills with miners needing to prove how much electricity they utilize in their operations.
While South Korea is not a major crypto mining hub, there have been reports of a significant uptick in cryptocurrency mining activities in the country. Back in March, local news sources revealed an increase in mining hardware imports especially via Incheon, the country’s most popular air terminal.
Cryptocurrency mining hardware with a market value of $150 or less is considered “for personal use” in South Korea.
“PC bangs” — the popular term for PC gaming rooms in South Korea — have also been utilizing their computers to mine cryptocurrencies amid declining patronage due to COVID-19 lockdown restrictions.
As previously reported by Cointelegraph, crypto mining with gaming PCs is becoming popular in South Korea.
Apart from the operating expense deductions for miners, the government has also offered some clarification on the incoming tax regime. South Korea’s 20% tax on crypto trading will only be applied to gains above 2.5 million won (about $2,230) earned in 2022.
Despite significant opposition to the crypto tax law, the country’s finance minister has previously stated that the move was inevitable. Meanwhile, a recent survey commissioned by a local television station showed over half of the participants in the poll in support of levying taxes on crypto trading profits.
Back in April, South Korea’s prime minister nominee Kim Boo-kyum promised to look into the crypto tax law amid continued criticism from cryptocurrency stakeholders in the country.
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