South Korea’s Financial Regulator Unveils Taxation Plans for Cryptocurrency and ICOs
South Korea’s financial authorities are actively working on preparing new taxation plans to introduce taxes on crypto trading and ICOs.
By Julia SakovichUpdated
3 mins readPhoto: Pavlos Giorkas / Flickr
South Korea is known as one of the most enthusiastic countries in the sphere of technologies and innovations. Now the country’s regulators are working on elaborating their decision on regulation of cryptocurrencies and ICOs.
As it has been revealed by South Korea’s incoming finance minister Hong Nam-Ki at the meeting with the country’s Democratic Party, the financial authorities are considering an option to introduce a cryptocurrency tax.
Taxation Plans
According to the minister, the South Korean government is planning to tax cryptocurrencies and initial coin offerings. Though the ministry is already working on new taxation plans, they will be presented only after consultation with experts.
It is planned to create a working group consisting of specialists of government agencies including the National Tax Service and the private sector. Moreover, the financial authorities will take into consideration the world’s best taxation practices. Nevertheless, right now it is too early to speak about the final version of this plan as it is only at the initial stage.
ICOs in South Korea
Though it is already known that not only crypto trading will be taxed but also ICOs, the authorities still haven’t decided how it would be carried out. But they claimed that they would elaborate the ways of imposing taxes in full accordance with the current market conditions and global industry’s tendencies with a view to ensure the highest level of customers protection.
ICOs are currently banned in South Korea, many citizens and residents of the country manage to find opportunities to invest in them abroad. Now the country is seeking the most feasible ways to bring them back and regulate them. Such a move will help the government to receive additional income from taxation.
Legalization of ICOs is still just an idea, nevertheless, in the context of possible charging taxes from people who want to invest in such projects, the government itself is interested in allowing this form of raising funds.
Minister’s Stance Towards ICOs
As CoinSpeaker has reported, South Korean authorities were going to reveal their final decision on the possibility of reallowing ICOs within the country in November. Nevertheless, still, it hasn’t been announced.
South Korea’s incoming finance minister highlighted that while cryptocurrencies are a new phenomenon and there is no any single internationally elaborated approach to this class of assets, the country should be very careful in building the regulatory framework.
As for ICOs, he also emphasized that there is a lot of work to be done:
“We will determine our policy orientations on ICOs with relevant agencies after reviewing the results of the financial regulator’s market survey and getting feedback from experts.”
Though initially it was expected that cryptocurrencies would be somewhere aside from the regulation, the reality has turned out to be quite different. Some countries, like Spain, for example, have already introduced crypto taxes, while some others including Russia and South Korea are considering such an option. It means that in the future we may see cryptocurrencies even more regulated than they are now.
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