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South Korea Denies Reports of 10% Tax on Cryptocurrency Profits

South Korea’s Ministry of Strategy and Finance says that the current information claiming that the government authorities are preparing to impose a 10% tax on cryptocurrency trading profits is not accurate according to a published article in CCN.
A local news agency Chosun cited a government official to claim, that the government was preparing to slap a flat 10 percent tax rate on profits from cryptocurrency returns irrespective of the size of the investment.
The government official was quoted saying these statements. “We have already decided to tax profits from investments in cryptocurrency. The question is only how much time we should give investors and when to start implementing it.”
The report claimed that the government has already decided to classify those profits as “other income”; that the government does not see cryptocurrency as financial or investment products.
“Other income” refers to irregular or temporary income unlike “earned” income as provided in the domestic taxation laws. This supposed 10 percent tax was said to be being considered in a revised tax law this year.  The amended tax bill will have a grace period of one to two years before it becomes effective.
But a representative of the Ministry of Strategy and Finance comments that the said report “is different from the fact.”
According to a report from Business Korea, the likelihood of taxation will “take a considerable (period of) time,” even if the government decides to tax cryptocurrency trading profits. The report added that it would be necessary to establish a legal system to source for relevant taxation information from domestic cryptocurrency exchanges before the application of a tax structure.
The South Korean government has been studying taxation structures of other countries such as Germany, Japan, United States, etc. Even though there were reports that a tax plan was expected to be announced in June, the tax division of the Ministry of Information and Communication is expected to propose a revised tax bill at the National Assembly this August.
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