The South Korean government is making changes to its crypto tax laws as it prepares to fully take over its regulation.
The Ministry of Economy and Finance in South Korea is changing the Income Tax Law currently on ground in South Korea. Part of the changes may affect profit making form cryptocurrency trades and crypto mining activities in the country.
E Daily on May 27 reported that the ministry is also looking at regulating ICOs in the country and the profits that can be raised from them. This means that people will begin to have a better view of ICO which has been banned for sometime now.
The newspaper also revealed that the ministry’s eyes are not on BTC transactions or other crypto to crypto transactions since they can give losses. Tax regulation will only be on transactions that are bound to generate profit.
What do gains mean in crypto transactions
The ministry’s proposal was as follows:
“We are considering capital gains tax or other income tax on profits made by domestic and foreign investors in the transfer of virtual assets.”
Someone from the Ministry of Information and Technology said that taxes will be on transactions where income is sure.
At first, the government thought of taxing profits realized from individual crypto activities but the idea was shunned because profits from virtual currency transactions made by individuals are not regarded as income. Hence, they won’t be considered in the new law for income tax taxation.
The government is yet to decide if profits from cryptocurrency transactions should be considered the same as those derived from stocks and real estate.
Decenter made it known that the amendment will be complete around July and presented to the Parliament in September this year.
South Korea’s attempts to legislate on crypto taxes
Although the law for Income Tax is yet to be concluded, Bithumb Korea was told in December 2019 to pay a tax of 80 billion won, an equivalent of $68.9 million.
Bithumb didn’t take this lightly as they proceeded to the court immediately. They argued that no established law governing tax payment for foreign exchanges in the country was in place.