South Korea has been at the forefront when it comes to regulating the cryptocurrency and fintech industries. Recently, South Korea passed a law making crypto trading a legitimate operation in the country. Now country’s lawmakers are seeking to impose taxes on crypto incomes from starting 2021. South Korea’s Ministry of Economy and Finance proposed the revisions to the existing taxation laws to include the crypto industry. According to a local news report, the South Korean Ministry will announce the proposed amendments in July and submit them to the national assembly in September this year.
Transactions between cryptocurrencies won’t be taxed.
The amendments, which are also supported by the Ministry of Information and Technology, will see South Korea’s tax income generated from selling cryptocurrencies. However, transactions between cryptocurrencies will not be subjected to taxation. An official from the Ministry of Information and Technology said that they are looking at different ways to tax if profits are made through transactions, mining, ICOs following the principle of ‘tax where income is located. The official also clarified that loss-making transactions would not be subjected to the taxes, just like in securities laws.
South Korea passed a bill making crypto trading legal.
Earlier in March this year, the South Korean parliament passed a historic bill making crypto trading legal in the country. However, the bill will take one and a half years to come into effect from the date of signing. Crypto-related businesses, such as exchanges, trusts, wallet companies, and token-sales, would have to comply with new rules once the law comes into effect. Cryptocurrency businesses in South Korea would be required to obtain an information security management system (ISMS) certification. A recent survey conducted by the South Korean wallet provider Childly showed that two-thirds of crypto users favor cryptocurrency taxation. The independent study included more than 5,750 crypto users from around the world, and only one-in-five crypto users were opposed to digital asset taxation.