Crypto Profits Won’t Be Taxed In South Korea Yet

Crypto profits and all other profit generated from crypto trading will not be subject to tax in South Korea according to the recent announcement from the Ministry of Finance and Strategy of the country as we are reading further in the crypto news.

The ministry clarified that the crypto profits will not fall under the current tax laws and that the law doesn’t consider crypto trading gains as taxable incomes which means that the crypto traders are not required to pay taxes on the profits they earn from crypto trading for the time that they do so. However, the crypto traders in the country might not be excluded from taxation for a long time. the official of the Ministry said that they are aware of the loophole in the current tax law and they will be reviewing the regulations again:

 “The income tax law is only taxable on income listed as taxable. We are preparing a taxation plan for virtual assets by comprehensively reviewing the taxation of major countries, consistency with accounting standards, and trends in international discussions to prevent money laundering.’’

The digital currencies have no legal status in the country yet and for crypto to be added to the tax laws, South Korea first has to clarify certain problems such as the definition of digital assets and the legal status of crypto whether or not to categorize crypto profits as capital gains and how to obtain trading information from exchanges for their tax law purposes. The new law will require South Korean exchanges to implement Know Your Customer policy for the users in order to collect information about the trading activities of each trader.

Although the crypto trading activities conducted by the local traders are still not a subject to taxation, the South Korean regulator, the National Tax Service has ordered BitHumb which is the largest crypto exchange in the country, to pay a stunning $69.5 million for withholding taxes of foreign customers that traded on the exchange in Korea. It is still unclear how the regulatory body was able to identify the trades that were made by foreign users unless the regulator has information such as phone numbers and country codes of the traders.