Cryptocurrency is many things – a means of paying for goods and services, a store of wealth and an investment tool and as a result of this, cryptocurrency transactions can be many things from selling of assets to raise funds or simply liquidating one’s store of wealth or paying for goods and services. While cryptocurrency-related tax laws are being better developed around the world, they face the ongoing problem of how exactly they should be classified and how the tax regarding them should be treated as they have been a number of missed steps in the past and overall, the issue is still being figured out in various jurisdictions.
In South Korea, it seems the government intends to tax capital gains on cryptocurrency transactions according to a new law that is due to be introduced by the South Korea Ministry of Economy and Finance by the first half of 2020.
Capital Gains on Crypto
This is not the only development with regards to crypto that is taking place in South Korea as the Korean National Assembly is working on a new law that will increase transparency in terms of cryptocurrency trading and should this pass, it will go into effect a year after the assembly’s plenary meeting.
Even though the capital gains bill is to go into effect regardless of other legislation, there is still some clarity that needs to be provided on certain crypto-related terms in order to understand the new government interventions. This is a consistent issue within the cryptocurrency industry when it comes to regulations as some definitions are not universally agreed on and as such, the implementation of laws sometimes gets tricky.
For example, it has not been properly clarified whether the gains from crypto-related trading are to be treated the same way as gains from stock or real estate trading. Also, in order for this taxation plan to be implemented, the government will need to require trading records from various cryptocurrency exchanges which are already done in the United States. All these developments simply go to show that the crypto industry is becoming mainstream around the world and the government is taking notice.