South Korea is going through a transition in taxation laws when it comes to profits made from digital assets or currency, and as the government works on a more comprehensive tax system for cryptocurrency, the crypto community and service providers are left floundering, uncertain of what to expect with the new regulations.
The confusion mostly stems from South Korea’s National Tax Service recently serving Korean crypto exchange Bithumb a staggering tax bill of $68.9 million USD for the profits it made while current regulations dictate that the government “cannot impose income taxes on individuals’ profits from transactions of cryptocurrency”. Individuals are not required to declare their cryptocurrency profits as they are not included under current income tax laws.
However, the South Korean government has made known its intentions to recalibrate legislation to eventually include cryptocurrency under taxation laws.
According to a report by CoinTelegraph, the Ministry of Economy and Finance are making plans to revise current tax laws. The changes cannot be made under existing regulations, and much more research and studies are required before the government can push out new legislation on this matter.
“We are preparing measures to impose taxes on virtual currencies by comprehensively reviewing cases of taxation by major countries, consistency with accounting standards and trends in international discussions on preventing money laundering,” the ministry stated.