A local report indicates that South Korea’s Minister of Finance and Economy believes that the country should impose a tax on cryptocurrency trading and investing. He added that South Korea has been discussing with other countries the introduction of a new digital law.
South Korea To Impose Tax On Crypto?
The Asian country has been rather indecisive regarding whether or not to tax cryptocurrency profits. At the start of the new decade, the Ministry of Economy and Finance said that the existing tax law didn’t consider digital asset trading gains as taxable income. However, the Ministry was aware of this loophole and was reviewing regulations in other countries to amend their legislation.
Less than a month later came another report from South Korea, which notified that the nation could start classifying cryptocurrency trading profits as “other income.” As such, it would place it in the same category as honorarium income and prize winnings such as the lottery, leading to a 20% tax on any gains.
The report from today cited the Finance Minister Hong Nam-ki. While speaking in front of the parliamentary finance committee, he said that the government “has continued to realign its tax system to reflect changes in market conditions, but it is especially working to refine its list of taxable items and types of tax this year.”
Nam-ki revealed that his Ministry will present further details regarding cryptocurrency profit taxation in July.
South Korea In Talks For A Digital Tax Legislation
The Minister of Economy and Finance also noted that South Korea has been taking part in debates among numerous countries over a new digital tax.
While he didn’t disclose which other nations are involved in the discussions, he said that South Korea’s tax revenue could benefit significantly from foreign firms if such a digital tax is imposed. However, it could also expose local firms to taxation in other countries.
“Personally, I believe a digital tax needs to be imposed as a new type of tax, and the government is also considering moving in that direction,” Nam-ki asserted.
People Support Crypto Taxation
South Korea-based finance company compiled a study this year on people’s perceptions regarding cryptocurrency taxation. Out of nearly 6,000 surveyed participants, 48% strongly agreed that a form of such tax “is a must.”
Another 18% agreed “at an acceptable level,” meaning that the total percentage of supporters was 66. Only 20% of all respondents dissented from the majority.
Those who had the strongest opposing views insisted that the current laws and frameworks are not efficient enough to cover the innovative nature of cryptocurrencies. If, however, more effective rules are presented, they could change their stances.