- This new tax strategy is initially planned to be implemented from October 1
- he government’s time frame for the compliance shall be increased to January 1, 2023, and said the current time frame isn’t reasonable
- KBA also argued that extracting the user’s tax data is another challenge that isn’t practically possible in the given timeframe
Korea Blockchain Association (KBA) has argued that the crypto taxation will be delayed by two years. On October 14 the Government of Korea announced a 20% tax on digital assets, including cryptocurrencies. This new tax strategy is initially planned to be implemented from October 1, 2021. Ahead of the enforcement of the Act on the Use and Reporting of Specific Financial Transaction Information (Special Law) in March of next year, it is an opinion that a one-year grace period is needed for the cryptocurrency trading site, which is busy in motion.
As per the prevailing law, digital assets transactions and income from those were not listed as the taxable income under the Income Tax Law.
The stance of the Blockchain Association
KBA commented that the crypto industry is entirely in compliance with the current tax law and will follow the newly implemented change. The government’s time frame for the compliance shall be increased to January 1, 2023, and said the current time frame isn’t reasonable. As per the recent announcement, Crypto exchanges can revamp the old system and adopt the new tax law before September 2021. KBA is arguing that the new regulations will be complicated to be applied in the busy structure of the crypto exchanges.
KBA also argued that extracting the user’s tax data is another challenge that isn’t practically possible in the given timeframe, no matter how fast and robust a crypto exchange. Another spectrum is the acceptance of the business report of exchanges as per the Special Money Act. According to this Act, cryptocurrency exchanges need to report business, and the authorities shall accept the report for allowance of operations.
Local news website News1 reported that an industry insider commented on the scenario that the measure to expand the capital gains tax on stocks was set on January 1, 2023, even though the taxation infrastructure was relatively in place. The point of giving the preparation period is a contrast.
KBA’s Chairman Oh Kap-soo commented that the industry is currently under a great deal of difficulty preparing crypto taxation. He states that uncertainty, whether a business will be allowed to continue its operations ahead of the Special Money Act’s enforcement in March 2021, has raised new difficulties. Thus, the government should consider a reasonable time so that the crypto industry can contribute to the national economy.
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