According to the latest announcement by South Korea's Ministry of Finance, the country's current tax laws do not tax profits earned through cryptocurrency transactions.
The Ministry of Finance and Strategy of South Korea recently answered the confusion regarding the taxation of gains from cryptocurrency transactions. According to the announcement of the Ministry of Finance, the current tax law does not support the taxation of cryptocurrency income.
- South Korean officials: Government considers 20% tax on cryptocurrency transactions
- South Korea: Taxes on cryptocurrency transactions expected to start in 2020
In simple terms, Korean cryptocurrency traders are not obligated to pay taxes based on the income they receive from transactions. The current tax law does not recognize that cryptocurrency transaction proceeds are taxable events, which may be the gospel for many in the Korean crypto industry.
Interestingly, this department is currently controlled by the Korean Liberal Party. The party has long supported a "loose" regulatory policy on digital and cryptocurrency transactions. They are also supporters of blockchain technology and its development.
However, although the current law does not list cryptocurrency revenue as revenue, many people are wondering whether this situation will change in 2020 or later. Officials in the Treasury are of course aware of the flaws in tax law. Multiple sources have revealed that the department is currently working on and proposing a new amendment to fill this loophole and include cryptocurrency taxation as soon as possible.
South Korean Finance Minister Kyoil Choi said:
"In order to make transactions transparent, the cryptocurrency industry should be included in the system."
Earlier, Korean exchanges such as Upbit have removed several privacy coins, including Zcash and Monroe, which also proves the regulator's pursuit of transaction transparency.
Authorities say that these cryptocurrencies are privacy coins and are likely to be used for money laundering purposes. Although most people think that privacy coins are unpopular because they actually allow cryptocurrency users to protect their privacy, others believe that cryptocurrencies need more transparency to continue on the road to popularity.
Contrary to the latest statement, there was news yesterday that South Korean exchange Bithumb owed $ 70 million in taxes to the South Korean Internal Revenue Service.
The issue of taxation of Korean cryptocurrencies remains unresolved. On the one hand, cryptocurrencies should not be taxed under current law. On the other hand, Bithumb is likely to pay $ 70 million in taxes, and the authorities are currently working on a new amendment aimed at levying taxes related to cryptocurrency activities.
At the same time, just a few weeks ago, some reports said that Ukraine also plans to introduce a bill to collect income tax on cryptocurrency transactions, and that multiple countries may take the same measures. From this point of view, it seems that more and more countries will focus more on cryptocurrency taxation in 2020.