South Korea To Unveil Cryptocurrency Tax Policy In June
Ministry of Strategy and Finance in South Korea has announced plans to unveil a cryptocurrency taxation policy before the end of the first half of 2018, specifically in June.
The news about the country’s plans to introduce a cryptocurrency taxation framework was first announced by a South Korean news outlet called Fuji News Network (FNN) roughly one week ago. A spokesperson for the country’s Ministry of Strategy and Finance stated that despite the fact that they plan to introduce the framework in June, there is no specific timeframe for its implementation. However, chances are that it will commence in 2019.
South Korea unveiled the plan after the G20 meeting which took place in March this year. However, the country’s government has been working on a solution considering the previous announcement by South Korea’s deputy Prime Minister in December 2017, stating that they were evaluating taxation methods for the Bitcoin market. The country also announced in January that cryptocurrency exchanges would be taxed under the already existing corporate tax policy. The latter features a 2.2 percent income tax rate and a 22 percent corporate tax rate.
“Transfer income tax that levies taxes on profits” has been proposed by the cryptocurrency task force of the South Korean government. According to FNN, the transfer income tax will be charged on profits. However, if the income generated from cryptocurrencies is irregular and considered temporary, the tax force will consider imposing other income taxes.
The Ministry of Taxation in South Korea has been seeking inspiration for cryptocurrency taxation from other countries. It has been sending its employees to other countries including Germany, Japan, UK, and the U.S so that they can study how those countries implement their taxation framework into cryptos. According to the surveys carried out by the employees, the most common implementation method involves taxes on income.
FNN claims that the South Korean government will unveil a full-scale cryptocurrency regulation framework after the country’s elections which will be held on June 13. The South Korean news outlet also revealed that the Ministry of Finance also plans to hold a cryptocurrency conference which will also be attended by G20 members on June 14. The ministry will also host the G20 international financial system on the next day after the G20 conference. This highlights South Korea’s growing involvement in the international community and its commitment to the cryptocurrency market.