There are different types of misconceptions about cryptocurrency all over the world. People are in confusion about the uses, value, appearance, and transaction of Cryptocurrency. If we call it in simple language then this is virtual money with similar effects ordinary type of money. The way we use dollars, pounds, yen, and euros, this digital or virtual money presents the same way to deal or transact. The difference is only their invalid physical counterpart just like we do with banknotes and coins.
The misconceptions are just because of a lack of proper knowledge. Where a portion of the public is unaware of the crypto income where a large portion is earning huge profit by utilizing it very well. Bitcoins are leading to their advantages. The existence of cryptocurrency in electronic form has made it more popular. Some of the people refuse to deal with this rare type of asset or money.
Where the advancement of this money at the international level has forced the South Korean government to plan new income taxation in the year 2021. For that purpose, they have planned to impose a tax on the crypto income. Traders, miners, and more will have to follow this new income tax plan. The Korean Tax Agency is engaged in introducing the regulations of this new taxation plan to Economy, finance, and other ministries.
Below are a few aspects associated with the South Korean plan for taxation from the year 2021:
- Addition of clause in amendments: They have added new clauses related to crypto which will be mandatory to be followed from the effect of the year 2021. As per a current report, Korean ministries are following the process to finalize required amendments for income tax with updates. These updates will be related to cryptocurrency.
- Only profitable income will take part: They are also focusing on different sources to impose different forms of income tax. This income tax will be charged on the profits of domestic and international investors by using cryptocurrency.
- Security of the clause: According to the Ministry of Information and Technology, the additions/changes in amendments are done to secure that only profitable income will be categorized for tax. Once noticing the earning of investors with cryptocurrency without paying tax the ministry of South Korea has decided to act with these clauses.
- Finalization of amendment: As per the information, this amendment will appear in parliament Korea in September months of the current year. The finalization will be done before the submission in parliament. The earlier efforts for the same were done in 2017 but due to some reasons, that time enforcement was not given to this taxation law for cryptocurrency. This time the hopes are high. The investors are gaining higher profits by investing in cryptocurrency. If we look at the last Korean assembly response of march month then also, we get a positive hope for the enforcement of taxation law for cryptocurrency income.
- Responsibilities of crypto exchanges: Crypto exchanges are told to prepare the proper records and details on investors, their, profitable income, and further information. They will have to prepare a secured and real data which they will have to submit to the authorities in the case of requirement. The exchanges will be also responsible to report FIU to support FSC of South Korea.
The efforts of the Korean government show that they want to enter their name in the list of countries that levy income tax on the income of cryptocurrency. America, Australia, Germany, Japan have already started levying tax on cryptocurrency.
This could be bad news for the investors of cryptocurrency. Some of the investors have shown interest in this new provision where many are against. However, the Korean government has planned for it, and hopefully, in 2021, this new provision will apply to the crypto income. Further plans will take part after getting approval from the authorities.
Some other important points associated with the taxable crypto income in South Korea:
- Rate of interest: As per the government of South Korea They have considered imposing a 20% tax on crypto income.
- The income tax: The Korean ministry of economy and finance has introduced the proposal of taxable crypto income to their country. This is the image of further terms and doubts.
Japan treats crypto income as similar as miscellaneous income. South Korea is also looking for the view and proceeding accordingly. The rate of interest may vary as per the fluctuation of the income of cryptocurrency investors may arise. We can think with different views by giving importance to various reports until the amendment gets approval. A clear image will be in front of everyone once it is officially declared that crypto income is taxable income in South Korea. Many countries are waiting to watch the new tax law of South Korea about crypto income. We must wait patiently, till then investors are required to prepare themselves.