The planning and finance committee of South Korea’s national assembly passed amendments to the country’s tax laws on December 1 wherein a new cryptocurrency tax regime will come into effect in January 2022.
On November 25, the legislature suggested delaying the adoption of a cryptocurrency income tax rule until January 1, 2022 instead of October 2021.
The decision will give local crypto businesses more time to adapt to new tax laws. The newly passed amendments stipulate that investors in South Korea pay a 20% tax rate on crypto trading gains above 2.5 million won ($2,260) per year. Korean authorities first finalized the tax rate in July 2020.
According to a brief help article published on Coinbase Tax Resource Center, 1099-MISC Forms will be issued to US Coinbase customers who have received $600 or more in cryptocurrency through Coinbase Earn, USDC rewards and/or staking income during 2020.
Prior to this change, Coinbase has been issuing Form 1099-Ks to US users who had more than 200 transactions and $20,000 in volume in any given year. This tax form only reported gross proceeds for the user and omitted critical cost basis information which was essential to accurately calculate your capital gain taxes. Lack of knowledge on how to accurately report this form on taxes lead to some recipients receiving IRS CP2000 tax notices and overpaying crypto taxes.