South Korea’s economic department is recently discussing a taxation bill related to cryptocurrency, which aims to establish a capital income tax for cryptocurrency. In the discussion on July 13, members stated that the income tax on cryptocurrency may be increased to 20%.
Cryptocurrency can be regarded as a "commodity"
The proposed amendments to existing laws plan to classify cryptocurrencies as "commodities" rather than currencies.
Legislators have determined that virtual assets can be regarded as electronic certificates of economic value that can be traded electronically. However, if the transaction is for sales purposes, it can be considered an asset.
A South Korean court cited Bitcoin (BTC) in its judgment, stating: “So far, virtual assets have only been recognized as a function of currency and have not yet paid income tax. However, recently, virtual assets (such as Bitcoin) have become more Many places are traded as commodities with property value. While considering various conditions, such as confirming that intangible assets have property value, the necessity of taxation and the property value of virtual assets are also confirmed."
The clause also states that those who do not live in the country will withhold income tax on cryptocurrency transactions.
According to data from the Financial Services Commission, South Korea's financial regulator, the average daily transaction amount using cryptocurrencies is 1.1 billion US dollars. In addition, the average transaction volume between January and May 2020 is $6.33 million .
South Korea’s income tax on cryptocurrencies may hinder the development of emerging markets for the technology.
Good luck collecting it.