Implying tax on Bitcoin use, South Korea may be the first

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.

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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”.

Also Read: Toss payment app to add Bitcoin transactions: South Korea

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.

Read Next: IRS says, only 802 people paid taxes on Bitcoin profits

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Sara K

Sara is steadily working on cryptocurrency evaluations, news, and fluctuations in digital currency prices. She is guest author associated with many cryptocurrencies admin and contributes as an active guide to readers about recent updates on virtual currencies.

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