Korean crypto taxes coming in 2020

Korean crypto taxes coming in

Korean crypto taxes are going to be a reality soon. The South Korean government is planning to tax the cryptocurrency gains under the capital gains category. Interestingly, Korea has emerged as a hub for cryptocurrency trading which means a substantial amount of money is being generated in this area.

However, despite the mammoth crypto trading industry, there is no definite tax framework to account for the gains. The sale of digital assets from crypto speculation just wasn’t possible in Korea till now. All that will be a thing of the past as the Korean Ministry of Economy and Finance has proposed to tax the crypto trading profits as capital gains starting next year.

Korean crypto taxes will be charged under capital gains

Just like more short term capital gains tax, Korean crypto taxes will also be subject to same. The bill for Korean crypto taxes will be formulated and tabled next year. A much more detailed crypto taxation bill is being drafted by the Korean National Assembly. Such legislation will certainly improve the transparency associated with otherwise secretive digital assets.

However, the general taxation mechanism demands that all the historical trade data about the crypto deals are revealed as well. So, the exchanges operating on the Korean soil will have to maintain separate records containing extensive user information as well as the trading history of the individual.

Anonymous crypto trading is already history

Crypto exchanges in almost every country have implemented ‘Know your Customer’ policies. Now users have to comply with strict KYC procedures and provide detailed identity information before registration.

However, purists are saying that cryptocurrency taxation laws are against the spirit of the decentralised cryptocurrencies. Such a system is akin to the fiat currencies which are backed by the governments. So, this will go down as another attempt to regulate the Bitcoin fraternity.

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Gurpreet Thind

Written by Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.