South Korea’s ministry of strategy and finance is reportedly planning to announce a cryptocurrency taxation framework by June’s end this year. The government is expected to begin taxation in 2019.
In the aftermath of the recently concluded Finance Ministers’ meeting at this year’s G20 summit, South Korea is planning to unveil its cryptocurrency tax plan alongside the G20’s own plan to field recommendations for regulating the crypto sector by July 2018.
According to Korean publication Financial News, the Ministry of Strategy and Finance is considering crypto adopters’ capital gains tax and other income taxes as possible inclusions for its tax plan.
An official from the ministry stated:
We do not have a specific time frame, but we are thinking about announcing a virtual money tax in the first half of the year.
Among other proposals, the ministry is looking at levying a tax on profits generated by the sale of cryptocurrencies. If any income stemming from crypto transactions is seen as ‘temporary and irregular’, other forms of income taxes are reportedly being considered.
‘In order to tax the income accruing from a virtual currency transaction, it is necessary to amend the income tax law to add it [to the category of] taxable objects,” the report notably added, suggesting a tweak of existing taxation law to include cryptocurrency transactions under its purview. The Tax Division of the Ministry of Information and Communication is expected to submit a proposal to revise the taxation bill at the National Assembly in August this year to pave the way for cryptocurrency taxation to kick in from 2019.
South Korea’s taxation ministry has been studying crypto-taxation approaches taken by other countries by sending staff to nations including Japan, Germany, the United Kingdom and the United States.
As Korean authorities seek to normalize cryptocurrency transactions, allaying previous fears of a ban on domestic exchanges and crypto transactions, the Financial News report also hints at the government planning ‘full-scale” crypto regulation following the country’s elections in June.
Featured image from Shutterstock.Follow us on Telegram.