The South Korean government has, at last, arrived at a conclusion over the taxation of digital currencies as it intends to sort the earnings from digital currency speculation as income. As per the local media source, The Chosunilbo, the government has effectively chosen to levy around 10 percent tax on the pay earned from digital currencies.
It additionally cited a high-ranking government official, as saying:
“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 government will change the tax bill this year and taxation on digital currencies will be incorporated into this bill. However, the government will obviously give a grace period of around one to two years as opposed to dumping them on the crypto investors.
Allegedly, the plans to levy taxes has just been there as the bitcoin furor achieved “alarming levels”, that began toward the end of a year ago and streamed into the early times of this current year. In any case, the rate for the same hasn’t been chosen.
The authorities don’t think about digital currencies as the investment or financial items, so as indicated by the media source, “it tentatively decided to classify them as “other income”.
A government official also shared, “Gains on investments in cryptocurrencies will be taxed at a fixed rate regardless of the amount.” And this tax is expected to be in the range of 10 percent. However, there are still uncertainties surrounding the whole crypto sector in South Korea. The National Tax Services also haven’t figured it out yet how it will be assessing crypto trading as an official said, “We’re not sure whether we can include the new plan in this year’s revised tax bill.”