South Korea is the latest governmental body to get into the cryptocurrency tax business. The Korean National Assembly plans to tax cryptocurrency transactions as capital gains.
According to report published by The Korea Times on December 9th, the Ministry of Economy and Finance; ; South Korea’s tax division, will draft the bill to introduce the measure in mid-2020.
In addition, the governmental body will introduce a bill aims at making cryptocurrency trading and transactions transparent. If the bill succeeds, it will go into affect 1 year after session.
South Korea pending cryptocurrency legislation
While the bill to tax cryptocurrency transactions as capital gains is not tied to the other proposed legislation, The Korea Times reported the government body will provide a more streamline definition of cryptocurrency and digital asset before any direct intervention.
One clarification, in particular, is whether profits from crypto tradings are to be treated the same as profit from trading stocks or transactions from real estates.
Before implementing measures to tax cryptocurrency transactions, the government will need access to users trading records from domestic and international crypto trading platforms.
South Korea’s anti money laundering rules
A new bill, namely, “Act on Reporting and Use of Certain Financial Transaction Information,” was recently proposed. If the bill is passed, banks will be required to create cryptocurrency exchange accounts under real names.
In doing so, the government is forcing crypto exchanges to follow the same rules applied to crypto traders. Rules such as Know Your Customer (KYC), and other anti-money laundering laws transitional banks and financial institutions must adhere to.
Under the new bill, cryptocurrency exchanges will be regulated by the Financial Services Commission; South Korea watchdog. The country will also release a centralized cryptocurrency licensing system that was previously recommended by South Korea’s Financial Action Task Force (FATF).
South Korea’s most popular cryptoccurency exchange, Upbit, own and operated by SK’s tech giant Kakao, lsat month reported that 342,000 ETH coins were stolen from the exchange.
The ETH coins disappeared while the developers were moving crypto assets from hot to cold crypto storage and vice versa. Some from the crypto community thought the theft was an inside job. Upbit’s executives promised to refund the stolen Ether tokens using the company’s reserved funds.
What are you thoughts on South Korea’s proposed measures to tax cryptocurrency transactions as capital gain?
Mathieu is a Information technology professional with over 15 years of experience. He started one of the first bitcoin blogs existed in 2010. He started writing about, investing in bitcoin and promoting the first cryptocurrency when only a few technological savvy people knew about it. Mathieu is a world traveler who enjoys culture, technology, finance, salmon, rice and beans. He’s cool, collected and knows a great deal about blockchain technology.