South Korea Develops New Cryptocurrency Tax Law

South Korea has begun developing new legislation that will require individualspay income tax on profits derived from cryptocurrency trading operations. The law will be presented in the first half of 2020.

Ministry of Strategy and Finance of South Koreastated that under current law, individuals may not pay income tax on transactions with crypto assets, since this type of income is not specified in the income tax regulations. However, this goes against the fact that the country's Tax Service collected about $70 million from the Bithumb cryptocurrency exchange to pay taxes.

The situation with Bithumb caused a lot of controversy amongdepartments of the South Korean government, prompting him to consider in more detail taxation and finance. The Ministry of Finance stated that such legislation is already in the process of development, and the current Tax Code will be amended, which will provide for the payment of taxes on income from trading in digital assets.

“All transactions that increase the income of an individualindividuals or corporations must be taxed. But when it comes to transactions with virtual currencies, it is almost impossible to know the amount of tax revenues,” — South Korea's Ministry of Strategy and Finance said, adding that to resolve this issue, it is necessary to take cues from other countries and comply with international standards and trends.

South Korean authorities said the new law onThe taxation of cryptocurrencies will be prepared in the first half of this year, but first you need to introduce a clear definition of digital assets and find out whether the income from cryptocurrencies and the income from the sale of shares or real estate can be classified in one category. Before starting work on new legislation, the South Korean authorities may need access to information about trading transactions on cryptocurrency exchanges.

In November, South Korea planned to introduce compulsory registration of cryptocurrency exchanges, otherwise their owners could face up to five years in prison or a heavy fine.

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