The Korean government is preparing to tax capital gains from the sale of cryptosystems. Appropriate laws are expected to be enacted from the 2020 tax season.
Korea wants to tax crypto capital gains
Until recently, Korea was one of the most active markets for crypto-speculation. However, there was no direct framework for taxing capital gains on the sale of digital assets, the Korea Times reports. Now, the Ministry of Economy and Finance is working to establish a measure, which will become the tax law from next year.
“There were corresponding discussions,” said an official of the Ministry of Economic Affairs. “The revised bill will be drafted by the first half of next year.”
The Korean National Assembly has also worked on a crypto tax law. Any law should increase the transparency of all aspects of crypto-trading. However, Korea will certainly try to tax capital gains from the sale of digital assets.
If legislation follows the usual approach to taxing capital gains, Koreans may need to provide a detailed history of their crypto-trading operations. Virtual currency exchanges will then also have separate records for each user and detailed personal information.
Anonymous trading is no longer possible
Most crypto exchanges already have a significant amount of traded coins via KYC techniques. Korean traders also link their accounts to bank accounts and trade directly in Korean won. Beyond decentralized exchanges or obscure markets, 2019 is almost impossible to trade anonymously.
The taxation of Bitcoin (BTC) and other digital coins is in conflict with the spirit of the cryptocurrencies. However, the sale of a virtual coin generates Fiat profits and is considered taxable.
However, the idea of a database of transactions and crypto owners looks more like another attempt to control Bitcoin.
Korean interest in crypto trading dropped in 2019, with a smaller share of Korean won pairs. Part of the descent comes from the decline in activity on the Altcoin markets. But BTC remains attractive and one of the main sources of profits in 2019.
The Korean won currently captures only 0.84 percent of all BTC trades, which has slowed significantly since the peak times of trading. Nevertheless, there were temporary peaks in trading in the last month.
Korea joins a long list of countries dedicated to tracking crypto transactions and trading.