The South Korean Ministry of Strategy and Finance has reportedly announced that they have plans to announce a virtual money tax pretty soon this year. This announcement was made after the Finance Ministers’ meeting at the G20 summit that took place in Argentina from March 19-20.
Crypto enthusiasts had seen this coming and had patiently waited for it since December 2017 when South Korea’s Deputy Prime Minister and Minister of Strategy and Finance announced that they were working on taxation methods for the cryptocurrency market in South Korea.
As of January 2018, the South Korean government said that it would be taxing cryptocurrency exchanges with the existing tax policy, ie, 2.2 percent local income tax, and 22 percent corporate tax.
The South Korean government has been working proactively towards legalizing cryptocurrencies so that they can be used just like the existing currencies are used. Officials from South Korea’s Ministry of Taxation had earlier been sent to US, Germany, Japan, and the UK for surveying the various tax frameworks those companies had in place for cryptocurrencies.
The new crypto tax framework is supposed to be implemented from June 2018 and is expected to be a major push for the cryptocurrency market in South Korea.
While the government would begin implementing the framework for cryptocurrencies tentatively from June 2018, the framework may take as long as the beginning of 2019 to be seen in full effect.
Another proposal which the ministry put forth revolves around levying taxes on the profits generated by the exchange of cryptocurrencies. The income from crypto transactions is, however, pretty irregular and temporary. Hence the government is also looking into other forms of income taxes which can be used to keep the income from virtual currencies in check.
There is much speculation about the future of cryptocurrencies in the global market. With countries like South Korea, US, Denmark, Sweden and most of the rest of the world backing cryptocurrencies, the grass is definitely going to be greener for cryptocurrencies in the future.