South Korea approves digital currency tax delay

Spread the love

What was originally rumored, has officially been approved. On November 30th, the South Korean Strategy and Finance Committee approved an amendment that delays the implementation of a taxation plan for digital currency traders. What was originally supposed to be implemented on October 21, 2021, will now be implemented in January 2022.

How will the tax plan work?

Digital currency traders in South Korea will pay a 20% tax on any income over 2.5 million won (around $2,000) that they make from trading. For example, If you make a total of 5 million won by buying and selling Bitcoin for one year, you have to pay 500,000 won in taxes, in other words, 20% of the 2.5 million you made trading. If your income from trading is under 2.5 million won, you will not be required to pay the trading tax on your income.

Why was implementation delayed?

The Committee approved the delay because local digital currency exchanges claimed that they needed more time to create the infrastructure for the new taxation plan. With the new plan, digital currency exchanges will most likely need an accounting system that tracks user’s gains and losses and notifies them when traders have passed the 2.5 million won threshold so that they can send them a tax form.

RECOMMENDED READ:  Bitcoin Cash Price Movement Analysis for 18th February 2021

The recent events at Coinbase regarding tax infrastructure stresses just how important it is for a digital currency exchange to have the proper infrastructure in place before a tax plan launches. Coinbase users in the United States were wrongfully receiving CP2000 notices from the IRS due to Coinbase’s inefficient tax infrastructure. A CP2000 is a form the IRS sends out when it believes there is conflicting information between your income and what you submitted on your tax return.

The complaints from Coinbase users prompted Coinbase to change the tax form they send digital currency traders on their platform from a 1099-k to a 1099-misc.

 162 Interactions,  2 today

Canadian bank wants to announce a dollar-backed digital currency ‘in the coming months’

Stablecorp CEO Jean Desgagne said VersaBank's digital currency was intended to provide an alternative to crypto market uncertainty and security Read more

New proposal could allow holders of DOGE,XRP, LTC to create ‘stable tokens’ on Flare soon

Trustline, a California-based credit network, plans to release a new stablecoin that will be deployed on the Flare network and Read more

Augur, Dogecoin, Monero Price Movement Analysis for 24th February 2021

At press time, the famous privacy coin Monero stabilized on the charts and saw a rise above the $230-level at Read more

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact Us

%d bloggers like this: