Korea to tax Bitcoin use
South Korea lawmakers held a National Tax Service(NTS) in Sejong on 13th October. The NTS commissioner Han Seung-hee answered queries about bitcoin taxation.
Han Seung-hee were ask, “what is the taxation plan?”. The commissioner replies,
“I am still taxing business income, and I am discussing whether to tax the value-added tax or capital gains tax with regard to virtual currencies such as bitcoin”.
According to Han, presently his department discussing the VAT and capital gains tax issues with the Ministry of Strategy and Finance. Moreover, the commissioner points out that use Bitcoin will lead to gift of tax evasion. Henceforth, implementation of valuation methods needed with the respect to the taxation of cryptocurrency gifts.
South Korea’s crypto regulatory efforts
In Saturday’s hearing, the lawmakers pointed out that Japan has classified digital currencies as “general assets or services and treat them as subject to excise tax”.
The Japanese National Tax Agency explains,
“Gains and losses (gains or losses recognized on the basis of relative relationships with foreign currencies or foreign currency) arising from the use of bitcoin, as a general rule, except for cases arising in association with acts that cause various incomes such as business income, are classified as miscellaneous income”.
In August a “Bitcoin Regulation Act” declares by lawmakers Park Yong-jin no action was undertaken. South Korea has been working on their regulatory framework for digital currencies.
Later on, regulators then met in early September to discuss how to deal with digital currencies. Therefore, they brought few measures like making cryptocurrency exchanges conduct due to intensity and implement stricter verification processes.
Additionally, the Korea Communications Commission Ministry of Science and ICT and announced that they will conduct on-site inspections of cryptocurrency service providers including bitcoin exchanges. Later, at the end of last month, the government announced that all ICOs are banned in South Korea.