South Korean government is planning to levy a tax of 10 percent on income from cryptocurrencies which might be included in the tax bill revision this year. However, the government will provide a grace period and is still working on crypto’s taxation and trading aspect.
Get ready to pay your Bitcoin taxes
The South Korean government has finally come to a conclusion over the taxation of cryptocurrencies as it plans to categorize the earnings from cryptocurrency speculation as income. According to the local media source, The Chosunilbo, the government has already decided to levy about 10 percent tax on the income earned from cryptocurrencies.
It further quoted a high-ranking government official, as saying:
“We have already decided to tax profits from investments in cryptocurrency. The question is only how much time we should give investors and when to start implementing it.”
The government will be revising the tax bill this year and taxation on cryptocurrencies will be included in this bill. However, the government will apparently provide a grace period of about one to two years instead of dumping them on the crypto investors.
Reportedly, the plans to levy taxes has already been there as the bitcoin craze reached “alarming levels”, that started at the end of last year and flowed into the early periods of this year. However, the percentage for the same hasn’t been decided.
Planning is still underway
The authorities don’t consider cryptocurrencies as the investment or financial products, so according to the media source, “it tentatively decided to classify them as “other income”.
A government official also shared, “Gains on investments in cryptocurrencies will be taxed at a fixed rate regardless of the amount.” And this tax is expected to be in the range of 10 percent. However, there are still uncertainties surrounding the whole crypto sector in South Korea. The National Tax Services also haven’t figured it out yet how it will be assessing crypto trading as an official said, “We’re not sure whether we can include the new plan in this year’s revised tax bill.”
Moreover, the Justice Ministry hasn’t decided how to classify cryptocurrencies and it will take time.
Just two weeks back, the largest crypto exchange of the country, Bithumb paid 30 billion Korean Won ($28 million) to the National Tax Service (NTS). It’s yet to be seen at what percentage and when will the taxation on bitcoin earnings will be implemented.
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Having a background in writing, I worked on a wide array of industry topics and have recently entered the world of Blockchain and Cryptocurrency.