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New report has it that South Korea’s Ministry of Economy and Finance is set to implement a crypto taxation legislation.
According to an anonymous source, the topic of taxing crypto users have been in the pipeline for a while now. It is believed that South Korea’s government via the office of the Ministry of Finance has been flirting with a 20 percent tax rule on crypto profits.
Going by the recent update, the Ministry of Economy and Finance recently ordered its subdivision, focused on income tax, to review a taxation plan for crypto assets. Apparently, the office of property tax has already reviewed this crypto tax plan. With the ball in the court of income tax, the Ministry may very well be placing the final piece of the puzzle. Therefore, crypto users and enthusiasts in the country should brace themselves up for a possible crypto taxation law.
While we are not sure of what form the tax will take, we do know that it may likely be up to 20 percent – at least that is what the official revealed. Te anonymous source professed that even though the crypto tax plan is not finished yet, it is probable that it will include a 20% tax on profits derive of cryptocurrency.
One recurring question is how the government would categorize gains from cryptocurrencies. Without a clear and apt categorization, crypto investors may be left to suffer at the end of the day. It is also important to note that this presumed tax is not exclusive to private crypto users alone. Crypto exchanges are expected to fall in line too.
Currently, rumor has it that the government is set to categorize gains from virtual currency trading as ‘other income,’ instead of capital gain. Going by existing rules, ‘other income’ include gains from lottery purchases and prizes, as well as gains from lectures.
Crypto Tax Is Understandable But Unclear
The issue of regulating virtual currencies has somewhat extended to imposing taxes on crypto holders. Governments are unsettled because people can easily use virtual currencies to evade tax. It is understandable, though, because any country without faithful taxpayers would crumble.
That said, taxing crypto holders wouldn’t be as easy as the regular taxation. First, this new class of digital assets would have to be defined and for the government to completely understand what should be taxed, else the taxing scheme becomes at the detriment of crypto users.
What do you think about government taxing crypto holders? We would like to hear your say!