South Korea is Exploring New Crypto Tax Laws

The government of South Korean is preparing to legislate crypto taxes by proposing a new amendment to the existing law.

Listen to article South Korea's Ministry of Economy and Finance is preparing an amendment to apply to the nation's Income Tax Law.

This could include rules for profitable sales of cryptocurrencies as well as profits from national crypto mining projects.

According to local newspaper E Daily on May 27, the ministry also mentioned including the profits generated by initial coin offerings, or ICOs.

The report specifies that crypto-to-crypto transactions, such as Bitcoin, will be "Likely" exempt from the proposed amendment and only seeks to tax-for-profit transactions and not loss-making ones.

"We are considering capital gains tax or other income tax on profits made by domestic and foreign investors in the transfer of virtual assets."

The South Korean government attempted to draft legislation to tax individual crypto profits at the beginning of the year.

Since individuals' profits from virtual currency transactions are not listed as income, these earnings do not fall under income tax taxation.

According to Decenter, the proposed amendment will be ready by July and will be brought to Parliament in September 2020.South Korea's attempts to legislate on crypto taxesAlthough the process of creating crypto tax laws in South Korea is just beginning, the National Tax Service imposed 80 billion won in December 2019 to the local crypto exchange, Bithumb Korea.

The company undertook administrative litigation over the tax bill, as taxation rules towards foreign corporations that have no permanent establishment in the country have not yet been applied to the crypto industry.