South Koreans with individual crypto investments enjoy ease for the time being as government announces crypto-profits to be non-taxable under the existing tax law of the country. It was officially stated by the Ministry of Economy and Finance of South Korea that is in charge of the economic policies.
According to the present norms, capital gains that are yielded from financial investments selectively fall under the tax bracket. Any kind of income that is not clearly explained in the law becomes non-taxable. Since the existing tax law of South Korea has no mention of the tern virtual currency, no transaction related to the same can be taxed.
However, it was further stated that the government is reviewing the norms related to the international standards and individual approaches of prominent nations towards crypto taxes so that the existing laws can be amended accordingly.
It has been a while since the country’s Ministry of Economy and Finance has been working on amending the tax law so that crypto investments can be made taxable. Before the bill amendment happens the government will need to make some significant clarifications such as the absolute definition of crypto assets and if the profits will be put under the category of capital gains. The government will also have to decide how they plan to acquire the records about crypto exchanges so that it can be taxed accurately.
The ministry further stated in the matter, ”We are preparing a taxation plan for virtual assets by comprehensively reviewing the taxation of major countries, consistency with accounting standards, and trends in international discussions to prevent money laundering.”
The National Tax Service of South Korea has put the crypto profits under the miscellaneous income category. This category includes other kinds of profits from lottery winnings, rewards, etc. On the contrary, any earning from real estate and stock trading are also considered as taxable capital gains.
While the domestic crypto gains are not being taxed, the South Korean government has imposed a tax of 80.3 billion won which amounts to $69.5 million on trade by foreign customers of Bithumb Korea which is one of the largest cryptocurrency exchanges in the nation.
While the present domestic crypto investors enjoy their non-taxable gains, reports reveal that the new altered bill on crypto taxes is expected to be drawn on the first half of the New Year.