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Korea urged not to rush to taxation for cryptocurrencies

  • Cryptocurrency community cites tight deadlines to prepare tax infrastructure

  • The cryptocurrency market itself, according to the Korean blockchain association, meets tax standards

  • Cryptocurrency exchanges in Korea will oblige all users to undergo verification

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Korean Blockchain Association urges Korean authorities to postpone taxation of cryptocurrency assets until 2023 to prepare appropriate infrastructure

The Korean cryptocurrency community has called on the authorities to postpone the introduction of taxes for the cryptocurrency industry until January 1, 2023, writes the Korean edition of ZDNet. So far, the entry into force of tax controls on the cryptocurrency and blockchain market in South Korea is scheduled for October 1, 2021..

Korea urged not to rush ...

According to the association, the authorities will not have time to prepare the tax infrastructure properly until October 1 next year..

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In particular, the association refers to the law on the use of information on financial transactions, according to which the tax office can collect confidential information only after the approval of the exchanges themselves by the end of September 2021. Just a month later, the Korean tax office plans to start calculating tax data.

“The industry complies with the standards for taxation of income from cryptocurrencies and is ready to actively cooperate in this direction, but there is too little time for implementation,” the association said..

In addition to creating tax infrastructure, exchanges will also need to implement an information security management system and verify all user accounts..

All under the standard

To create a tax infrastructure, according to the association, a system is needed that would divide all users into residents and non-residents of the country. Besides identification, the system must also calculate transaction details for each individual trader in the form of tax data.

“Such a load must be taken into account in the formation of tax cooperation by mobilizing human and material resources in a new business,” the association added.

Recall that the South Korean authorities are planning to introduce a tax on income received from operations with cryptocurrencies in the amount of 20%. The government classifies the profits generated from trading cryptocurrencies as income from winning the lottery or receiving a cash prize.

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The very taxation of cryptocurrencies in Korea has been in effect for a long time. Tax authorities are already levying a 20% tax on cryptocurrency transactions, but only from non-residents. The duty is charged at the time of converting cryptocurrencies into fiat money.

It should be noted that the tax pressure of the crypto market is increasing not only in the Asian market. Earlier, the editorial staff of BeInCrypto reported that the US Internal Revenue Service made significant adjustments to the tax form for reporting for 2020 to identify the shadow owners of cryptocurrencies..

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