As the new year 2020 starts, South Korea has good news for its crypto traders. It has stated that income tax can’t be levied on the individual investor’s profit from cryptocurrency operations.
2 January 2020 | AtoZ Markets – The South Korean government has recently confirmed that it isn’t possible to levy an income tax to an individual investor’s profits from crypto transactions. While this may be true within South Korea’s current tax law, the relevant authorities are seeking to change this.
The country’s government is reviewing the world’s trends and the approaches of major countries when it comes to crypto taxation. This is all in an effort to amend Korea’s existing tax laws to incorporate cryptocurrencies.
Crypto tax exemption by omission
South Korea’s Ministry of Economy and Finance is in charge of, as the name would suggest, overseeing South Korea’s economic policy. The ministry clarified that crypto trading profits cannot be taxed under the current laws.
For the time being, crypto traders are relieved from any taxation. Nevertheless, the ministry was preparing for a taxation plan of virtual assets by comprehensively reviewing the taxation of major countries. Furthermore, they will review “consistency with accounting standards, and trends in international discussions to prevent money laundering.”
South Korea taking steps to remedy legislation
Even if this is the facts of the here and now, the Ministry of Economy and Finance has been heavily pushing for an amendment of tax law. Specifically, one that allows for crypto taxation. A Ministry official explained that discussions of this amendment have already started. The official speculated that the revised bill would be drawn up by 2020’s first half.
There are, however, many hoops to jump through to properly amend the country’s tax law to allow for this. First, the state must give a definitive description of what crypto assets are and whether or not the currency should be considered a form of capital gain. Furthermore, it must define how the government is planning to gain trading records from its exchanges to properly levy its taxes.
What do you think of South Korea’s approach to crypto tax? Let us know in the comments section below.