2 days ago |
By Kevin Helms – |
South Korea Found a Way to Tax Cryptocurrencies Under Current Law
The South Korean government has announced that some taxes can be applied to cryptocurrencies under the current law, which will be finalized in the first half of this year. Other taxes are also being considered but some are not easily implemented under the current tax system.
Also read: Russian Regulators Draft Law to Restrict Crypto Mining, Payments, and Token Sales
Some Taxes Coming Soon
The South Korean government has been discussing ways to tax cryptocurrency transactions. “Virtual currencies are not taxable under the current Income Tax Act,” Chosun described. Previously, the regulators had not confirmed if the current legal framework allows the taxation of cryptocurrencies.
However, at a briefing on the amendment bill for the Enforcement Decree of the Revision of the Tax Code on Sunday January 7, Choi Young-rak, head of the tax department of the Ministry of Strategy and Finance, was quoted by the Kyunghyang Shinmun:
There are some things that can be taxed under the current law.
Specifically, “Under current law, corporate taxation is possible,” Edaily quoted him explaining. The publication noted that the tax plan is expected to be finalized within the next six months. News1 Korea added, “The part that can be taxed by the current law will be taxed in the first half of this year.”
Specific Taxes Being Discussed
The Virtual Currency Taxation Task Force was recently created following the releases of government’s measures for crypto regulation. The group met for the first time recently with related experts and ministries including the Korean Ministry of Internal Affairs and Internal Revenue Service, according to Choi.
He was quoted by Asia Today, “There are some areas where legislation is necessary, such as capital gains tax. We need to review whether it is appropriate to impose capital gains tax and legislate.”
News1 Korea elaborated:
At present, it is concluded that the taxation of income tax, corporation tax, transfer income tax, etc. is possible in the case of virtual currency, while taxation of virtual currency is difficult in terms of value-added tax.
In addition, at a recent meeting of the National Economic Advisory Council, presided over by President Moon Jae-in, an official was quoted saying “countermeasures against the difficulty of tracking tax revenue are also necessary.” He added, “there is a need to regulate brokers who mediate virtual currency transactions such as exchanges and accumulate taxation information.”
How many different taxes do you think the Korean government will impose on cryptocurrencies? Let us know in the comments section below.
Images courtesy of Shutterstock and Edaily.