Cryptocurrency tax guidelines coming soon to South Korea
South Koreans, get ready. According to the media outlet Fuji News Network (FNN), regulators could be ready to publish cryptocurrency tax guidelines as early as June. The Ministry of Strategy and Finance is said to be in the process of reviewing the policies and plan on making an announcement soon.
The good news is that any tax policies would not go into effect until next year, so at least there’s a little bit of warming up time. The announcement came following the G20 meeting held in Buenos Aires, Argentina, last month. During that meeting, a deadline of July was agreed upon for recommendations on a global cryptocurrency policy.
Currently, South Korean residents do not pay taxes on cryptocurrency. However, the exchanges do. They pay a 22% corporate tax and a 2.2% local income tax, which is in line with what all corporations earning more than $18.7 million each year have to pay.
One proposal would be to tax profits made from the sale of cryptocurrency. That policy could be adapted to result in other tax liabilities if a transaction is deemed to be temporary and irregular. Deputy Prime Minister and Minister of Strategy and Finance Dong-yeon Kim has been looking at ways of taxing digital currency since last year, and is following the lead of other countries such as the US and Germany.
Following upcoming local elections in June, the South Korean government anticipates establishing complete cryptocurrency regulation. The Ministry of Finance and Economics has scheduled a conference for G20 members to be held on June 14, and an additional working session for the entire G20 international finance system scheduled for June 15.
The G20 meeting was expected to bring a clearer definition on the subject of cryptocurrencies. However, it would appear that there is still a great deal of confusion regarding their true place in the world economy. Following some pushback by several participants, it was decided that the group would hold off on establishing policy until more research was conducted.
Even after a consensus is reached, there is still the possibility that some G20 member nations won’t follow the guidelines. One country, Brazil, has already stated that it has no plans to regulate cryptocurrencies. The president of Brazil’s Central Bank, Ilan Goldfajn, told the others during the March meeting that it is highly unlikely that the South American country would adhere to cryptocurrency policies created by the group.
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