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South Korea to tax capital gains on crypto

Dec 10, 2019

Crypto taxation is one of the hottest topics of debate globally. And while most of the countries keep on discussing the opportunities of crypto taxation, South Korea takes the initiative into own hands.

The Ministry of Economy and Finance of South Korea has decided to tax earning from crypto-related profits by imposing capital gains tax on virtual currencies. According to government sources, it is expected that a draft bill will be drawn up by the finance ministry by the first half of 2020 year.

The government of South Korea is determined to levy capital gains tax on digital currencies even if the forthcoming bill will not be approved. In order to levy taxes, the government will also have to precisely define the term of cryptocurrency and collect trading data from crypto exchanges operating in South Korea.

Besides, South Korea’s government will have to decide whether the crypto gains tax will be implemented in the line with stocks or real estate capital gains.

South Korea is currently enhancing the know-your-customer (KYC) and anti-money laundering (AML) requirements and is moving towards the regulated crypto industry.

It worth noting that the National Assembly greenlighted legislation that recognizes crypto as digital assets and giving them a legal status. Current regulations require crypto platforms operating in the country to follow AML and KYC rules the same way as the other financial institutions.

Meanwhile, other countries are also considering to implement similar taxation regime on crypto earnings. For instance, Ukraine and the UK are proposing similar policy papers for crypto gain tax.

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