South Korea Announces Crypto Tax Plans
The South Korean government announced it will collect up to 24.2% of corporate and local income taxes from the country’s digital currency exchanges this year, according to Yonhap News. The local news agency also writes that, “under current laws, all corporations with income of over 20 billion won (USD 18.7 million) are required to pay 22% and 2.2% of corporate and local income taxes on their income.”
Cryptocurrency exchanges in Korea will not fare well where taxes are concerned: according to Yujin Investment & Securities, Bithumb is expected to pay about 60 billion won in corporate and local income taxes as its estimated earnings reached 317.6 billion won last year. The situation is not much different with other exchanges: according to CoinMarketCap, ranked first in daily turnover with USD 4 billion as of 5:30 p.m. Sunday.
Moreover, today Bitcoin and other major digital currencies came under renewed selling pressure after South Korea’s decision to ban anonymous cryptocurrency trading.
This should come as no surprise: last week, Yonhap News also reported that South Korean Finance Minister Kim Dong-yeon said in a radio program interview that, “we are also tinkering with the option of levying taxes.”
This followed his statement that, “the shutdown of virtual currency exchanges is still one of the options” (that the government has).
The news followed an announcement in late December the South Korean government is banning new trading accounts, and requiring users to use their real names. This was not the end of restrictions: just last week, more regulations were announced after the ban seemed to be officially scrapped, along with crypto trading being banned in military bases for being “bad for the troops’ morale.”