South Korea may impose income tax on cryptocurrency transactions

South Korea's Ministry of Economy and Finance is preparing amendments to the Income Tax Law, according toto which transactions with cryptocurrencies, as well as profits from mining, will be taxed.

According to local media, the law will also concernprofit earned during the initial tokens (ICOs). Perhaps this will soften the country's attitude to the ICO and give them a green light, since this method of raising funds is still prohibited in South Korea. At the same time, transactions with digital assets will be taxed only if traders profit from such transactions. Amendments will be ready in July and submitted to parliament in September.

The difficulty lies in the lack of a cleardefinitions of “profit” when making cryptocurrency transactions. In its proposal, the Ministry indicated that it was “a tax on capital gains or other taxes on the income of domestic and foreign investors in the transfer of virtual assets”. However, it is still unclear whether the profit received from transactions with cryptocurrencies can be equated with the profit from other assets, for example, stocks and real estate.

South Korea's Treasury Department reviewedthe possibility of introducing a 20% tax on income from cryptocurrencies at the beginning of this year. Despite the fact that tax legislation regarding cryptocurrencies in the country is just beginning to take shape, six months ago, the National Tax Service of South Korea (NTS) recovered from the Bithumb exchange about $ 70 million, accusing it that the exchange did not withhold taxes on foreign clients from profit cryptocurrency transactions.

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