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The South Korean finance minister confirmed the plan to tax cryptocurrencies

June 17, 2020

South Korea’s finance minister, Hong Nam-Ki announced plans to levy a tax on cryptocurrenciesin conversation with the parliamentary finance committee on June 17th.

The ministry will release more details of the plan next month, according to a report by local news agency Korea JoongAng Daily. Hong told the committee that the government:

“He has continued to realign his tax system to accommodate changes in market conditions, however is working in particular to refine the list of taxable items and tax types this year“”

Previous proposals for cryptocurrency taxes

As Cointelegraph reported The ministry considered a 20% tax on cryptocurrency income in January this year. This led some to speculation that such profits would be considered “other income” for tax purposes and would not attract capital gains tax.

The South Korean finance minister confirmed the plan to tax cryptocurrenciesThe South Korean finance minister confirmed the plan to tax cryptocurrencies

However, The Korea Tax Policy Association proposed a two-tier tax structure that initially included low trade tax before an income tax was introduced in cryptocurrency.

No further information was given on which of these proposals should be imposed.

Digital tax necessary for the globalized economy

The minister also said that the government had internationally discussed a new digital tax structure.

He expressed his personal support for such a tax and found that it can increase the country’s tax revenue from foreign companies. However, he admitted that it could also hold some local companies responsible for foreign taxes.

The decision to formalize a tax structure for cryptocurrencies in South Korea was made after Bithumb decided to contest a $ 69 million tax charge.and argue that cryptocurrencies are not legally recognized as currencies in the country.