Properly taxing earnings from crypto is a major debate topic all over the world; however, the South Korean government has finally found a way.
The South Korean Ministry of Economy and Finance has decided to impose capital gains tax on digital currencies, The Korea Times reported on Sunday.
Per the sources of the local publication, the ministry is aiming to prepare the first draft of the bill by the first half of next year.
“Related discussions have been taking place […] The revised bill will be drawn up by the first half of next year,” an anonymous official from the ministry told the publication.
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Taxation is mandatory
However, the report also outlined that the government will not rely on the approval of the upcoming bill – it is prepared to levy capital gains tax on incomes from digital currencies anyway. The government, however, should put a clear definition of cryptocurrency.
Moreover, it is also not clear whether the government is planning to implement the gains tax similar to profits from stock trading or real estate transactions.
The South Korean government is already collecting trading data from the crypto exchanges operating in the country, which is essential to impose a tax on such incomes.
Several other countries are also considering to impose similar taxation on crypto earnings. Last month, Ukraine proposed a similar bill for crypto gains tax. If passed, the nationals need to pay a five percent tax on crypto for the first five years, and afterward, the government will levy the standard 18 percent tax.
Meanwhile, several other crypto-related bills are pending with the South Korean Assembly for approval. The government is also determined to strengthen know-your-customer (KYC) and anti-money laundering (AML) rules and proposed an act to mandate banks to issue only real-name accounts to crypto exchanges.