South Korea’s National Tax Service Reveals Plans to Tax Cryptocurrency Users

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South Korea’s tax plan for cryptocurrency

Announced at the 2017 National Tax Administration, South Korea’s National Tax Service (NTS) announced its plans in regards to taxation of digital currencies, as well as discussed ways to make it compulsory for cryptocurrency exchanges to hand over the transaction data of their users.

According to Business Korea, the NTS “has decided to push for the plan to impose an income tax and transfer income tax on virtual currencies.”

Korea Times also quoted an NTS official present at the forum, who said:

“We will pursue taxation on virtual currencies such as bitcoin. Since virtual currency is a kind of property such as real estate or securities, it should be taxed according to the principle that ‘there is a tax on income.”

Deputy Director of the VAT Division Hank Kyung-soo emphasized the significance of gathering “detailed history data like who made transactions and how in a bid to impose taxes.” He also claims that if the agency finds a way to get hold of this data, “it will be possible to make a full taxation.”

“We are discussing with the related ministries, such as the Ministry of Strategy and Finance, how to make it compulsory for virtual currency exchanges to submit transaction data,” he concluded.

Amending Tax Laws

In addition, Professor Kim Byung-il of Kangnam University’s Department of Economics and Business Administration noted that cryptocurrency-related income and transfer income are already taxed by advanced nations overseas.

The professor explained that “business income tax, corporation tax, inheritance and gift tax can be taxed without an amendment of the law,” even though standards like the method of measuring the fair value of digital assets as well as its classification are needed.

Also, the NTS pointed out that it’s important to fix existing tax laws to impose transfer income tax on profits that came from trading with cryptocurrency.

Tax law still not ready for 2018

At a press conference held at the Sejong government office, Deputy Prime Minister and the Minister of Strategy and Finance Kim Dong-yeon stated that they’re still in the process of discussing the issue of cryptocurrency taxation. Etoday quoted him as saying:

“We have not progressed enough to put it into the next year’s tax law revision.”

Read More: South Korea Studies Methods of Potential Taxation Policy for Bitcoin