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- The Ministry of Economy and Finance of South Korea are preparing to impose income tax on crypto trading and mining from next year.
- According to sources, the South Korean ministries are looking for an amendment to the existing Income Tax Act.
- The ministry also discussed taxing the proceeds of the initial coin offering (ICO).
The Ministry of Economy and Finance of South Korea are preparing to impose income tax on crypto trading and mining from next year.
Amendment of existing Income Tax Act
According to sources, the South Korean ministries are looking for an amendment to the existing Income Tax Act. This will include a clause about profitable cryptocurrency sales along with profits of crypto mining projects taxes.
The ministry also discussed taxing the proceeds of the initial coin offering (ICO). Banned in the country, however, taxing ICO is quite questionable in South Korea.
Furthermore, the ministry quoted, the government is looking to raise capital gains via imposing taxes. The taxes will be imposed on the profit earned by domestic and foreign investors utilizing cryptocurrencies. The ministry revealed that completion of the proposed amendment is likely, in July. Further, it’s submission to the parliament is in September.
Exemptions on some crypto-to-crypto transactions likely
Besides this, there are some possibilities for the exemption of crypto-to-crypto transactions. The ministries believed to impose taxation if any income or profits are detected.
Previously, Seoul has already announced a new crypto law that describes provisions about exchanges. The exchanges have to provide data to the tax authorities as of a new protocol that will commence in Spring 2021.
Moreover, it seems that there could be further issues about the new plan. A spokesperson from the Korea Institute of Local Finance stated that the users who want to avoid taxes could do so by utilizing over-the-counter exchanges.
Meanwhile, the blockchain industry leader addressed that the government should make a stay on its tax plan. Until, it could develop significant measures of calculating tax bills, payable in fiat, on crypto transactions. Although the process will take around three to four years to come into existence.
