Regulation

Korean Government: “No Income Tax on Crypto Profits”

The Ministry of Finance and Strategy in South Korea announced this afternoon that current tax law does not support the taxation of profits from individuals engaging in cryptocurrency trading.

An official announcement from the Ministry of Finance and Strategy in South Korea stating that current tax law does not support the taxation of cryptocurrency transactions in income tax. December 20th, 2019

The Ministry of Finance and Strategy is currently under the control of the Liberal Korean Party which has long been a proponent of relaxed regulations regarding crypto trading and blockchain development.

The straightforward explanation from the short announcement states that there simply is no provision for cryptocurrency gains in the tax law that would recognize trading gains (and losses) as taxable events.

From the announcement, the ministry states that “The Income Tax Act accounts for the taxation only of taxable income… and personal cryptocurrency transaction gains are not currently items listed as income, and therefore are not taxable.”

Officials in the ministry are aware of the shortcomings in the current tax law and are working to formulate and propose an amendment that would close the gap in the tax law.

Minister Kyoil Choi said, “The cryptocurrency industry should be incorporated into the institutional sphere for the sake of transparent transactions.”

Minister Choi’s call for transparency of transactions comes just a short time after Upbit and other Korean exchanges delisted privacy tokens such as Monero (XMR) and Zcash (ZEC) on the advice of the new Financial Services Commissioner. Privacy tokens have been interpreted as a powerful money laundering weapon against sovereign nations.

Just a short few days ago, Bithumb exchange, from South Korea, was informed by the Korean IRS that they owe upwards of $60mil in back taxes.

Image result for virgil griffiths in jail

Additionally, although unlikely unknown to the ministry and National Assembly, American Virgil Griffith is currently under custody of the federal government in the United States for allegedly aiding North Korea in utilizing blockchain technology and cryptocurrency to undermine economic sanctions being levied against the country.

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