South Korea Becomes Latest Country to Consider Cryptocurrency Taxation, Final Decision to be Made in September

The cryptocurrency industry has been under the scanner of financial regulators since it first came to the limelight. With the increasing popularity of virtual assets such as Bitcoin, countries across the globe have begun to take steps to see that it is being treated as an asset under their purview.

Just recently, South Korea announced that it will join the list of countries that tax cryptocurrencies. Officials in the South Korean financial sphere have stated that taxation will always be present wherever there is a source of income. South Korea first came up with the idea of cryptocurrency taxation in 2017 but was then shelved due to implementation issues.

The South Korean Ministry of Strategy and Finance has made it clear that traders, ICOs, and mining operations will all have to tax on their profits. Officials of the finance authority shall prepare an amendment to the tax rules to ensure that cryptocurrencies are now included within the umbrella. The first announcement relating to the new rule is expected to take place in September, with regular assembly presentations planned for September.

Reports added that the Ministry of Finance also intended to consider taxes on capital gains and other taxes on income for both domestic and foreign countries. South Korean financial officials also pointed out that other countries have followed the tax model, with the US and France as main examples. A Ministry of Information and Technology said:

“We are looking at ways to tax if profits are made through transactions, mining, and public offerings (ICOs) in accordance with the principle of ‘taxation where income is located’. There are few countries that impose VAT and transaction taxes abroad, and they are not considering the introduction.”

Although the government sees taxation as a viable option, cryptocurrency experts say otherwise. The imposition of such a task becomes difficult because it is possible to avoid a legal network by carrying out interpersonal transactions. After South Korea first considered cryptocurrency taxation, 20 countries have implemented the same concept.

One of the main reasons for the slowdown is the sheer scale and complexity of the tax burden. Even the Chairman of the Korea Blockchain Association Tax Commission has confirmed that it would take at least 3-4 years for a concrete tax model to come to fruition. South Korea is also host to the world’s largest cryptocurrency exchanges. If the new tax laws are to come into effect early, it will be interesting to see how these bodies will react to the changes.

Source link

Leave a comment