Ministry Of Economy And Finance Of South Korea Is Drafting A Bill To Tax Crypto Income

• Ministry of Economy and Finance with Income Tax Subsidiary of the Government of South Korea is planning and formulating to draft a bill.
• The government regulated financial institution is drafting a new bill to set clear rules and system for taxing cryptocurrencies.
• Different countries have different tax rates on cryptocurrencies depending on the classification of income each country has put to cryptocurrencies.

Ministry of Economy and Finance with Income Tax Subsidiary of the Government of South Korea is planning and formulating to draft a bill to tax the income earned by cryptocurrency holding and trading.

The income earned in less than a year using crypto trading and selling is called the short term tax, and the user expected to pay less in charge, however, the traders gaining income for trading more than a year expected to pay a much higher tax for the revenue earned.

The government regulated financial institution is drafting a new bill to set clear rules and system for taxing cryptocurrencies. Other than that, the ministry is classifying the income gained through cryptocurrencies as “other income” and not as capital income.

Out of 40% of domestic revenue, 20% taxed the remaining 60% is tax-free. With the new regulations and imposing on cryptocurrencies, the tax rate can reach up to 42% say, officials. The idea of taxing the cryptocurrency has planned for a month now, and the officials haven’t given an exact date when the regulation and tax will be applied.

A revision bill expected to be passed in the latter half of 2020 to see the working of the cryptocurrency taxing. The tax plan is not final yet, and it still needs the majority from the ministry for the bill to pass.

Different countries have different tax rates on cryptocurrencies depending on the classification of income each country has put to cryptocurrencies. If South Korea taxes cryptocurrency as a miscellaneous tax, then the tax rate could go up to 55%.

Along with the bill to tax cryptocurrency income, the government has passed the bill to regulate the usage of cryptocurrency. For which all the cryptocurrency trading firms and individual traders expected to register with the Financial Services Commission.

The companies expected to follow the KYC rule strictly and Anti-money laundering follow-ups. According to a survey poll, the net amount of cryptocurrency held by individuals amounts to $1.9 Billion.

Ritika Sharma

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.