South Korean tax experts advised the Korean government to apply a low level of turnover tax on cryptocracy profits before imposing a transfer income tax on citizens, according to the Business Korea report. The Korean government is expected to announce its tax reform plan in late 2020.
During a seminar held on February 21, members of the Korean Tax Policy Association advised the South Korean government on the introduction of this two-tier plan, arguing that a targeted approach to the introduction of a personal income tax in crypto currency will be most effective.
The Korea Blockchain Association agreed with the proposal of tax experts, justifying its recommendation by stating this fact:
"There is still a lack of appropriate legislation and the tax infrastructure is still insufficient to cover crypto currencies and therefore some additions need to be made to the expenditure side.
The Association also added that before a transfer tax is imposed, it is necessary to clearly define the costs of acquiring the crypto currency. However, this is not easy to define as crypto currencies are traded at different rates on many different exchanges in Korea.
The South Korean Ministry of Economy and Finance is considering a 20% tax on income from cryptocurrency transactions. It is reported that a more specific tax framework for cryptographic currencies is being developed in South Korea.
