Report: South Korea to Announce Cryptocurrency Taxation Framework

By posted on April 4, 2018 1:30PM
South Korea Taxation

The G20 meeting held in Buenos Aires was focused on cryptocurrencies, among several other topics. Argentina’s Central Bank chair, Frederico Sturzenegger, mentioned that the member countries are expected to implement the recommendations until July 2018.

The South Korean news outlet Fuji News Network (FNN) just reported that, in line with G20’s recommendations, South Korea has a concrete plan for the taxation of cryptocurrencies. Despite the fact that the minister’s spokesperson mentioned that the plan will be introduced in July, there is no official timeframe for implementation. However, according to people in the know, the taxes will be levied starting with 2019.

It is well known that the Tax Division of the Ministry of Information and Communication has carefully evaluated the cryptocurrency related taxes levied by other countries, by sending employees to United States, Japan, and Germany. According to FNN, the conclusion of the surveys is that that taxation should be applied “based on the principle that there is a tax on income”.
Therefore, persons familiar with the matter, also suggested that the government could impose a tax on the profits generated by trading cryptocurrencies.

This moves are consistent South Korea stance on cryptocurrencies. As you probably remember, the government announced in January that domestic cryptocurrency exchanges are going to be taxed as per country’s corporate tax policy, which practically means a 22% corporate tax and a 2,2% local income tax.

According to sources, the South Korean regulator is expected to roll-out a “full-scale virtual currency regulation”. But this is not expected to happen before the local elections that are scheduled on June 13.

Photo CC0 via Pixabay

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