The regulatory framework on Crypto-Taxation was so far unclear in South Korea, although the government initially intended to begin taxing residents’ cryptocurrency-profits, the Ministry of Finance and Strategy in South Korea has now released the new announcement to clear the confusion regarding the taxation of profits made through crypto trading. Yeongju-si, Mungyeong-si, the member of Parliament of Liberal Korean Party has come up with the press release, according to which, the income of virtual currency transactions for individuals under current tax law is based on income tax. Because crypto-trading is not income listed in the law, it was determined that it is not taxable.
Their government was reportedly interested to levy capital gains tax on cryptocurrencies regardless of the bill’s passage. On that perspectives, they needed to establish a concrete idea of defining cryptocurrencies and decide as to how the tax regulation to be framed on crypto gains.
The Ministry of Strategy and Finance has also said, “the income tax law is only taxable on income listed as taxable. Adopts enumeration so that the individual’s virtual currency trading interests. It is not a taxable taxable income tax.” Under current income tax law, since income taxation is not possible, the revised tax law amends the position of the existing Ministry of Strategy and Finance was confirmed.
The Finance ministry is precisely structured by the country’s Liberal Korean Party. They are known to be the proponents of blockchain as technology and cryptocurrencies as currency system.
And now, they have been liberal in relaxing the tax regulations pertaining to the crypto trading in order to promote digital currencies.
In contrast to this news, the National Tax Service of South Korea (NTS) has decided to withhold income tax from Bithumb’s foreign customers. The total tax to be imposed on their transactions amounts to more than 80 billion won (over $69 million).
Hence, it seems that no precise taxation standards in the region, nor do they have explicit legislation for crypto-transactions, they are yet to be established at this juncture. The Ministry of Finance and Strategy has to announce the 2020 tax law reform that will present clarity on the taxation for incomes from cryptocurrency transactions.