On May 8, officials from South Korea’s Ministry of Strategy and Finance argued that a portion of the tax should be deducted from the mining income of cryptocurrency “miners” in order to be socially responsible, according to a report released by the East Asia Daily. According to the officials, a 20 percent tax should be levied on those who earn more than $2,220 a year from mining, and the policy should be implemented starting next January. In addition, South Korean digital asset miners should submit tax returns in May each year detailing the total won value of virtual currencies mined in the previous fiscal year.
Previously, on May 6, South Korea’s Ministry of Planning and Finance has also made it clear that the profits gained through cryptocurrency mining are the subject of taxation. The cryptocurrency mining profit minus the electricity cost is the criterion for taxing the income. The taxpayer must personally prove how much electricity is spent in the process of cryptocurrency mining.
Also, according to the JoongAng Daily News, the South Korean government plans to tax investors who make more than 2.5 million won in a fiscal year through cryptocurrency (20% other income tax) starting next year. Inheritance or gift tax will also be required if cryptocurrencies are given to children.
In South Korea, cryptocurrency has also been used as a wonderful solution to the problem of long-standing local tax delinquency. on April 25, the city of Seoul seized 40.2 billion won of cryptocurrency from the accounts of 963 delinquent local tax holders through four cryptocurrency exchanges. A source from Seoul’s 38th Tax Collection Division said, “We have started investigating the use of cryptocurrencies by tax defaulters to hide their properties. The effect was immediate, with many tax defaulters saying they are willing to pay their taxes immediately if the seized cryptocurrency is returned to them, and 118 tax defaulters who had their cryptocurrency seized have already voluntarily paid about 1.2 billion won in taxes. Various local governments such as Gwangju Metropolitan City and Gyeongnam Geoje City have also been eyeing the cryptocurrencies of tax defaulters.
With the increased interest of investment institutions in cryptocurrencies and the proliferation of cryptocurrency users, cryptocurrencies have also become an important target for government regulation around the world, with more and more governments joining in the effort to introduce cryptocurrency tax laws. Currently, the United States, Canada, the United Kingdom, Spain and other countries have issued or drafted cryptocurrency taxation guidelines.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/south-korea-to-impose-20-tax-on-cryptocurrency-mining-activities/
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