South Korean Finance Minister Hong Nam-Ki announced plans to impose a tax on crypto-currency while speaking to the parliamentary finance committee on June 17.
According to a report in the local news media, Korea JoongAng Daily, the ministry will reveal more details of the plan next month. Hong told the committee that the government:
„continued to realign its tax system to reflect changing market conditions, but is working especially hard to refine its list of taxable items and tax rates this year.
South Korea is considering a 20 percent income tax on crypto currencies
Previous Proposals for Cryptology Taxes
As reported by Cointelegraph, the ministry was considering a 20% tax on income from cryptomonies in January of this year. This led some to speculate that such profits would be considered as „other income“ for tax purposes and would not attract the capital gains tax.
However, the Korea Tax Policy Association proposed a two-stage tax structure, which initially included a low-level trade tax, before implementing a tax on income from cryptomonies.
The Tax Policy Association of South Korea proposes a two-step tax on cryptomonies
No further information was provided on which of these proposals should be imposed.
Digital tax needed for the globalised economy
The minister also said that the government had been discussing internationally a new digital tax structure.
The Bithumb crypto currency exchange Bitcoin Future goes to court for a tax bill of USD 69 million
He expressed his personal support for such a tax, noting that it could increase the country’s tax revenues from foreign companies. However, he admitted that it could also make some local companies liable for foreign taxes.
The decision to formalize a tax structure for crypto-currencies in South Korea comes after the major exchange Bithumb decided to contest a tax bill of USD 69 million, arguing that crypto-currencies are not legally recognized as currencies in the country.