South Korea’s Ministry of Economy and Finance is preparing an amendment to the nation’s Income Tax Law. It could include rules for profitable sales of cryptocurrencies as well as profits from national crypto mining projects.
On May 27 E Daily reported that the ministry also mentioned including profits generated by initial coin offerings despite ICOs still being banned across the country.
The report specifies that crypto-to-crypto transactions will be “likely” exempt from the proposed amendment. It only seeks to tax-for-profit transactions and not the oss-making ones.
The ministry issued the following statements on the proposal:
“We are considering capital gains tax or other income tax on profits made by domestic and foreign investors in the transfer of virtual assets.”
An official from the Ministry of Information and Technology clarified that the principle of taxation would be executed under “taxes where income is located.”
At the beginning of the year, South Korean government attempted to draft legislation to tax individual crypto profits.
However, since individuals’ profits from virtual currency transactions are not listed as income, these earnings do not fall under income tax taxation.
Although, it is still unclear if gains in cryptocurrency transactions are similar to profits in other assets like stocks and real estate.
According to Decenter, the proposed amendment will be ready by July and will be brought to Parliament in September 2020.
Source: Cointelegraph | Image: Unsplash