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South Korea Will Announce Crypto Tax Policies in July

Tax Policies

With the culmination of the G20 summit, the fears of many alarmists and Bearish traders subsided. For the crypto ecosystem, the summit ended satisfactorily. No negative announcements were made, in fact, the demonstrations of support drove a bullish trend in Bitcoin prices. The lack of an official statement determining a policy was mainly due to the necessity of achieving a global consensus on this issue since several countries had different considerations, making it necessary to discuss the issue in depth.

For that reason, the possible application of standard global regulation on virtual money was delayed to July. According to Argentina Central Bank chairman Federico Sturzenegger, the G20 considers this as a subject of particular importance:

“In July we have to offer very concrete, very specific recommendations on not ‘what do we regulate?’ but ‘what is the data we need?’ “

Korea to take the lead.

Of all the countries that participated in the G20 summit, South Korea was the first to announce its individual adherence to the agreement, and without having to wait for the G20 decision, they said that by July they would have developed a regulatory framework for cryptocurrencies to be effective nationwide.

According to the Korean news portal The Financial News, the government has a busy agenda with national and international commitments taking turns to meet its goals by mid-year:

“Meanwhile, the government plans to set up a full-scale virtual currency regulation right after the June 13 local elections. The Ministry of Finance and Economy will hold an international financial conference on virtual currency and blockchains for G20 members on June 14th in Seoul and will hold a second working session on G20 international financial system on the 15th”

To gain a better understanding of the state of crypto marketing regulations, the well-known local newspaper mentioned that the government sent a group of people to conduct direct investigations in several countries around the world, including the United States, Germany, the United Kingdom and Japan. The officials were able to conclude that each country had a different vision and background with regard to cryptocurrency:

“Currently, the US and the UK are taxed with capital gains tax, Japan with miscellaneous income, and Germany with other income. It is because the characteristics of virtual money were different in each country, such as payment means, monetary ability, financial assets, and so on. However, these countries have found that there are few cases where actual tax is imposed, as opposed to taxation based on the principle that there is a tax on income”

The South Korean “Crypto-Rollercoaster”

South Korea is considered by many to be the world capital of cryptocurrency. This country is the third most important market in the world. According to studies it is estimated that at least 3 out of 10 workers have invested in cryptos an average amount of 5.6 million Yuan. Not only that, but more than 80% of the investors had made a profit on their investment and only 6.4% had lost money. Such has been the level of adoption that the impact on the economy began to be a matter of concern for the government.

In December 2017, just as Bitcoin was going through a historic bullish run that brought it to $19,000, the government said “it would apply more scrutiny to the exchanges, including moves to curb anonymous trading”, according to BBC News.

In late 2017 and early 2018, Justice Minister Park Sang-ki’s statements began to raise alarm bells in Asian markets -highly influenced by this type of news-. According to Mr. Park. cryptocurrencies were a matter of “great concern” and he announced that studies were underway to ban their use in the country. Such statements, along with a series of raids to major Korean exchanges, created a panic in the market and helped to reverse the bullish trend of the cryptos in general.

Then, at the end of January, such statements were contradicted by South Korea’s finance minister Kim Dong-yeon who said: “There is no intention to ban or suppress cryptocurrency [market],” being the government’s main focus to regulate illegal trading.

Another point that made news was the publication of a petition against the regulation of virtual currency in which more than 228000 people signed demanding a response.

” I would like to ask.

Government: The world you see is different from the world our people see.

You think you protect the people, but the people think that the government takes away their dreams.

Please do not take away from us the happiness and dreams that we have for the first time in Korea”

Faced with the obligation to respond on behalf of the government by providing a concrete response, Mr. Hong Nam Gi, of the Office of Coordination of State Coordination pointed out that the country’s efforts were focused on tax regulation and not on the prohibition of trading:

“In the aspect of taxation equality that “tax should be paid if income exists,” various ministries, including the Ministry of Taxation, examine the cases of foreign taxation on virtual currencies, So, I think that it would be possible to get some information on the virtual currency taxation system soon.”

In mid-February of this year, Jung Ki-joon, head of the Economic Policy Coordination Office under the Office for Government Policy Coordination, was found dead in his home. A result of a heart attack that his colleagues attribute to the pressures of new responsibilities to coordinate government actions regarding the cryptos.

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With Korea’s approach now being the regulatory framework, the move could bring positive conditions for the nation as it would theoretically legalize crypto trading by giving traders and the general public more confidence to adopt these new technologies. The impact on the market will depend on the results observed in the middle of the year, however, expectations are positive.

Featured Image: twitter

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