According to a recent report published by Korea Herald, the country’s finance ministry is considering introducing a new tax on crypto-based income. From what is known right now, the tax on profits made from trading cryptocurrencies could be as high as 20%.
The finance ministry has not yet published an official announcement, but the report did quote one of the government officials, who openly stated that there is a real possibility of a 20% tax. Furthermore, it was reported that the country’s Ministry of Economy and Finance ordered the income tax officials to review the taxation plan for crypto.
While it remains unknown what decision the officials might bring, in the end, this development might mean that crypto-based profits might be categorized as ‘other income.’ If this comes to pass, the country’s National Tax Service (NTS) would be able to tax crypto gains itself.
South Korea’s efforts to get involved in the crypto industry
As many might know, this is not the first time that South Korea has been reviewing and considering crypto-related taxes. Recently, the NTS started the process of labeling gains made by foreign crypto users as ‘other income.’ The service then started collecting taxes through cryptocurrency exchanges.
This led to Bithumb receiving a massive, $70 million-large tax bill in December 2019, because it was withholding taxes regarding the trading activities of its foreign users. For the moment, the exchange is still trying to nullify the bill it received.
The new move shows that the government is serious about getting more involved with the digital currency industry. Another very important event for the crypto space in the country came a few weeks ago. Back then, the South Korean Presidential Office’s 4th Industrial Revolution Commission declared that it would be better to allow financial institutions to launch crypto-related services. This included services such as Bitcoin derivatives.