Following announcements earlier this month by South Korea ’s Ministry of Economy and Finance to revisit taxation laws on cryptocurrency and hinting at the possibility of taxing crypto profits. It seems that the ministry is likely to move forward on a 20% tax with cryptocurrency-related earnings to be classified under ‘Other Income’. Currently, lottery and prize winnings are classified under this category and are also subject to tax under the National Tax Service (NTS).
This information came from several government sources, as stated by Korean online media Pulse. The department overseeing income tax and its variations such as earned, annual and other income, has begun reviewing virtual and digital assets under its purview.
“The finance ministry is yet to finalize its direction but it surely has become more likely for the income from virtual asset trading to be labeled as other income, not as gains from transfer of capitals like real estate properties,” the Pulse quoted from an unidentified government official.
The change in taxation laws is happening in the midst of the dispute between Bithumb, the largest crypto exchange operating in South Korea, and the NTS over serving Bithumb a $68.9 million tax letter, even though as of today, no official regulations have been set on cryptocurrency gains tax.
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