Gov't seeking to levy taxes on virtual currency

The Korea Times

The Korea Times

Finance

Tue, September 26, 2023 | 21:49

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Gov't seeking to levy taxes on virtual currency

Posted : 2019-12-08 16:32

Updated : 2019-12-08 17:37

The headquarters of Korea's cryptocurrency exchange Bithumb in southern Seoul, Sunday. / Yonhap

By Kim Bo-eun

The government is seeking to impose taxes on capital gains from transaction of virtual currencies, including bitcoin, according government sources, Sunday. The Ministry of Economy and Finance confirmed it is pushing for the measure to be reflected in tax regulations next year.

"Related discussions have been taking place," a ministry official said. "The revised bill will be drawn up by the first half of next year."

A move to pass a related bill has also been taking place at the National Assembly.

A bill on enhancing the transparency of the trading of virtual assets awaits passage at sub-committee level. If the bill passes the Assembly's plenary session, it will go into effect one year after the regulation is promulgated.

The government's is seeking to include capital gains tax on virtual currency regardless of the bill's passage.

But for this to be reflected in regulations, there needs to be a more precise definition of virtual assets.

The government also needs to decide if it will consider gains from the trading of virtual assets as the type of gains coming from stock trading or real estate transactions.

If this is the case, the government needs to obtain trading records from virtual currency exchanges, to be able to levy taxes accordingly.

The bill on trading of virtual assets requires virtual currency exchange operators to identify traders and retain separate records for each trader.

However, unlike share prices the price of virtual currencies varies according to exchange, so it is more complicated to determine market price at the trading point.

bkim@koreatimes.co.kr