After G20 summit now the global concern is now in bringing crypto assets validation, South Korea seems to be in the forefront of implementing regulations on the cryptocurrency market, following the G20 meeting held in Argentina.
According to the Fuji News Network (FNN), South Korea should be starting to implement tax guidance on cryptocurrencies from June 2018. Currently, the ministry of strategy and Finance is reviewing the cryptocurrency tax guidelines and is expected to announce this before June.
The announcement of the future tax plan came after the Finance Ministers’ meeting of the G20 that took place last month between 19-20 March.
In December 2017, Deputy Prime Minister of South Korea and Minister of Strategy and Finance said that the country was looking into taxation methods for the local Bitcoin (BTC) market. More recently, in January, South Korea announced that cryptocurrency exchanges will be taxed in line with the existing tax policy, a 22% corporate tax and a 2.2% local income tax, the percentage was set for all corporations earning more than $18.7 million every year.
with the population of 5.12 crores (2016), the country has a large percentage of the citizens involved in cryptocurrencies. As such, they dictate the value of cryptocurrencies worldwide. The speculation of digital coins was irrationally hyped, Therefore, the government is making moves to curb the crypto craze in the country.
To impose a tax on Virtual Currencies like Crypto, it is necessary to add it as a Universal Taxable Object. There are few cases where actual tax is imposed, as opposed to taxation principle that there is a tax on income. South Korea’s Ministry of Taxation has looked internationally for examples in the taxation of cryptos, sending employees to the US, Japan, Germany, and the UK for surveys of their varying crypto tax frameworks. The surveys found that in most cases, taxation is applied “based on the principle that there is a tax on income,” as opposed to non-income taxes, according to FNN.
According to FNN, the Korean government will also be setting up “full-scale virtual currency regulation” after local elections on June 13. FNN adds that the Ministry of Finance and Economics will hold a virtual currency international conference held in Seoul on June 14 for G20 members, as well as the “second working session of the G20 international financial system” on June 15.