The government is finally coming for its cut.
Last week, the Finance Ministry revealed that it is preparing revisions to South Korea’s tax law to levy taxes on earnings from cryptocurrency transactions.
The ministry plans to submit the revision to the parliament in July. Assuming it gets passed, it would go into effect next year.
The new taxes will take the form of either a capital gains tax or income tax. The government has ruled out levying a surtax or transfer tax, citing lack of overseas precedent. Losses would not be taxed, either.
Interestingly enough, the taxes would get levied on earnings made not just from trading, but also on profits made from cryptocurrency mining and ICOs. The inclusion of that last one is intriguing since ICOs are practically — if not strictly legally — banned in South Korea.
Anyway, South Korea now has the infrastructure to levy taxes, too, thanks to the parliament’s passing in March of revisions to the nation’s financial laws that require cryptocurrency exchanges to keep transaction records and report them to the Korea Financial Intelligence Unit (FIU).
The Finance Ministry and National Tax Service plan to levy taxes on transaction records on a per person basis after talks with the FIU and Financial Services Commission.
Oh, and this tax is coming regardless of whether Bithumb wins its appeal on a nearly USD 70 million tax bill it got handed last year.
Now, you might be asking yourself, “If the government is going to tax people based on cryptocurrency records, how will they tax P2P transactions?”
Experts are asking the same question:
“E Daily quotes an official from the Korea Institute of Local Finance as stating that individuals who want to evade taxes will be able to do so by making use of over-the-counter (OTC) exchanges.
A blockchain industry chief, meanwhile, stated that the government should instead hold fire on its tax plans until it has developed a more effective way of calculating tax bills, payable in fiat, on crypto transactions – a process that could take “up to three to four years.”
Also in the Korean blockchain space…
(By Ledger Insights, May 26)
As we’ve reported earlier, Gangwon Province is launching a trial project to use blockchain and AI to remotely manage chronic cardiovascular disease. “The solution will record previous health data and uses AI to predict and analyze chronic health events,” says Ledger Insights. “Gangwan-do will first use the platform for 100 patients, and gradually expand the service to 450,000 people with chronic diseases in the province.” Though not mentioned in the Ledger Insights report, ICONLOOP is taking part in the project.
(By Jack Martin, CoinTelegraph, May 29)
(By TokenPost, May 29)
The Korea Internet & Security Agency is putting together a citizens group to monitor national blockchain projects. Anyone can apply to join the 80-person team, which will be tasked with monitoring a slate of publicly and privately led blockchain trial projects for 2020.