Taxation on individuals who post cryptocurrency profits in South Korea will soon be a reality. The South Korean government has announced that it is currently preparing a bill that would pave the way for the new taxes to take effect. The bill is also set to bring order to the country's chaotic relationship with crypto.
Agencies in South Korea have been at odds where the taxation of Bitcoin and other cryptocurrencies is concerned. The National Tax Service is charged with taxing South Korean cryptocurrency exchanges like Bithumb Korea. The Ministry of Strategy and Finance, however, issued a statement that profits from cryptocurrency were not subject to taxes because the digital tokens are not addressed in South Korea's existing tax laws.
The country was swift to take action once the Ministry of Strategy and Finance announced its position. Lawmakers will be drafting a bill that would revise the existing tax code. If passed the bill will require all cryptocurrency investors in South Korea to pay taxes on the profits they earn from trading.
This bill is an important step for South Korea in carving out its own definition of cryptocurrency. Like many other countries, South Korea has struggled with the proper way to deal with Bitcoin as a form of currency and as an asset class. To gain insight on how the pending legislation should be drafted, South Korea is looking at other countries.
How other countries deal with cryptocurrency is of interest to South Korean lawmakers who want to proceed cautiously with taxation laws. At the same time the country wants to make sure that it is able to advance regulations which will help to prevent the use of cryptocurrency by money launderers.
The coming months are sure to hold many developments for cryptocurrency investors in South Korea, the United States, and other parts of the world.