In an attempt to promote institutional adoption of the cryptocurrency industry, the South Korean government confirmed in an official announcement made on 30th December 2019, that crypto gains are not taxable.
Yes, South Korea has always been supportive of blockchain and cryptocurrency. It is, after all, one of the few countries to have unhesitatingly followed China’s footsteps to boost blockchain investments in the region by pledging a massive contribution of around thirteen million US dollars ($12.8 million) by 2020. In November 2019, it also passed a bill to regulate cryptocurrency in a bid to promote constitutional crypto growth.
It’s ‘ka-ching’ time for South Korean traders as Ministry quashes tax on crypto gains
Now, it is taking its commitment to crypto a step further by finally clarifying on the uncertainty surrounding the taxation of gains attained through crypto trading. The Ministry has announced that there will be no tax levied on profits earned from cryptocurrency trading.
The announcement, however, does not come as a surprise considering the fact that the Ministry, governed by the Liberal Korean Party of the country, has been pro-crypto and blockchain for the longest time. They have never hesitated from openly encouraging the growth of this up and coming technology.
Thus, following the announcement of the government refusing to recognize crypto earnings as part of income, the crypto community in the region leapt with joy as they will no longer be obliged to file tax returns on crypto gains and focus wholly on maximizing the profits.
The happiness may be short-lived, though
That said, many traders believe that this is just a temporary regulation to promote the growth of the industry. According to them, it is very likely that the government recognizes the potential risks associated with this regulation and amends it to address any loopholes.
An official from the Ministry confirmed the ambiguity by stating that the government is currently working on appropriately defining crypto assets and whether or not the crypto returns must be categorized as capital gains to attain complete transparency from cryptocurrency exchanges.
Comprehensive taxation law is being reviewed by assessing the stance assumed by other countries, trends in international business and compliance with accounting standards to curtail money laundering activities, confirmed the Ministry.
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