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- Stricter Tax Reforms for Investment in Digital Assets in South Korea to Outweigh Pandemic Loss.
- They plan to include such investments under the 20% tax bracket to sufficiently outweigh the loss suffered by the government concerning the pandemic.
The pandemic has hit the world like a storm that has introduced the concept of remote offices. Furthermore, that has not stopped people from spending what they earn. Hence, the South Korea government plans to bring in major tax reforms for its citizens, especially for gains resulting from cryptocurrency trading.
They plan to include such investments under the 20% tax bracket to sufficiently outweigh the loss suffered by the government concerning the pandemic. The country’s income tax department oversees the regulation of taxes for all the industries. However, the Ministry of Economy and Finance plans to bring their expertise on board.
The reforms might contract the Cryptocurrency market
The Korean government looks to bring the gains from cryptocurrency under the other income category of taxation. Once successful, they will be able to tax all investors on an equal footing. Concerns raised that the reforms might contract the virtual market all-together, but the government assures investors otherwise.
Moreover, the Moon Jae-in led government pronounced that investors should not shy away from the digital asset space. Although foreigners taxed for gains from cryptocurrency trading on Korean soil, its citizens too will have to pay duties to the government. A domestic tribunal slapped a $69.3 billion tax bill on Bithumb for withholding taxes paid by foreigners in Seoul. It shows that laws are bound to be strict for the safety and security of investors and protect the masses from the extremes of the pandemic.
Digital assets space is still in a grey area in South Korea
Finance minister Hong Nam-ki announced that the details regarding the tax laws would be published early next month and expected to implement from next year. The laws enacted to refine the country’s list of taxable items and find various sources of income for the government. The country has a rich history of investing in cryptocurrency, but the government’s regulation of the virtual sector might lead to conflicts.
It is still hesitant that regulation is the need of the hour as it might dilute cryptocurrency’s unique property – decentralization.