A Double Blow to South Korean Exchanges

Exchange Regulation South Korea Tax

Author

Tim Alper

Author

Tim Alper

About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

Author Profile

Share

Copied

Last updated:

January 9, 2024 05:48 EST

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

South Korean cryptocurrency exchanges have been dealt a double blow by the country’s government, with regulations in the pipelines – and higher tax bills also heading their way.

The Ministry of Strategy and Finance confirmed that it was drawing up long-awaited regulations. Although South Korean exchanges have previously welcomed talk of regulations, they may be a little concerned by the ministry’s choice of words – officials spoke of drafting “cryptocurrency countermeasures.”

Per media outlet Financial News, the ministry stated, “We are still in the process of preparing countermeasures for [cryptocurrencies] in conjunction with the rest of the G20. It is a matter that we are continuing to look into and actively discuss.”

Kim Dong-yeon, the finance minister and the country’s Deputy Prime Minister, also confirmed that the government is set to amend a law pertaining to the way exchanges pay income tax and corporate tax.

Currently, most exchanges have been eligible for classification as small and medium-sized companies, and are thus eligible for special business-fostering tax breaks. Qualifying companies can avoid paying between 50% and 100% in both income tax and corporate tax for their first five years. Older companies are currently eligible for tax discounts of up to 30%.

However, Kim confirmed that the government will seek to end to exchanges’ tax breaks, claiming exchanges do not generate sufficient “value” to justify continued exemptions.