Starting next year, the ministry (minister Mr. NamKi Hong) plans to collect taxes on profits from cryptocurrency ICO and mining.
According to the industry insight obtained on the 26th, the Ministry of Economy and Finance is going to include the relevant clause to the renewed tax laws that will be revealed in July. In regards to the profits from ICO and cryptocurrency mining, the ministry will stand firm with their stance on ‘taxes must be paid when profits are made;’ and that both domestic citizens and foreigners are to pay taxes on profits made from cryptocurrency exchanges as either income tax or capital gains tax. The ministry plans to include this clause to the renewal as soon as the reviews are done, and the amended tax laws will be introduced first in July before going to the congress in September.
Up until now, there has been confusion due to a lack of guidelines for cryptocurrency profits. For example, the National Tax Service (NTS) taxed the exchange Bithumb for the 80 billion KRW on the last December 30th which became an issue. There was no guidelines for the cryptocurrency exchanges on how the taxation amount was determined, and the reasons for such taxation was not fully justified. Bithumb paid off 80.3 billion KRW on 25th of Feb., but applied for an official tax relief in which the review is still ongoing.
However, as the Special Act was passed the Congress on the 5th of March, we now have a guideline to go by. According to the Act that will be in effect in next March, all users of exchanges are to keep the record of all transactions and also report to the FIU. The ministry is working with NTS, Financial Services Commission, and Korea Financial Intelligence Unit to finalize the details on the amendment based on the individual transaction records.
