South Korean Deputy Prime Minister and Finance Minister Hong Nam-ki
South Korean Deputy Prime Minister and Finance Minister Hong Nam-ki. Ministry of Economy and Finance/The Korea Herald

South Korea’s government is set to announce its plans to impose a tax on cryptocurrency later this year, Korean news outlet JoongAng Daily reported on 17 June.

The publication quoted the country’s Finance Minister Hong Nam-Ki, who was speaking to the parliamentary finance committee on Wednesday. During his speech, the official said that the ministry will reveal further details on its plans to tax cryptocurrency in the country next month.

He said to the committee:

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“The government has continued to realign its tax system to reflect changes in market conditions, but it is especially working to refine its list of taxable items and types of tax this year. Personally, I believe a digital tax needs to be imposed as a new type of tax, and the government too is considering moving in that direction.”

As previously reported, the Korean government was considering imposing a 20 percent tax on cryptocurrency income at the start of 2020. Though there are still no specific taxation standards for crypto assets, the Finance Ministry was considering classifying the returns made on cryptoes as a type of “other income”, which would place it in the same category as lottery earnings.

The decision to establish a tax structure for cryptocurrencies in South Korea comes shortly after major cryptocurrency exchange Bithumb received a $68.9 million tax bill from the country’s taxing agency. Later, based on the grounds that cryptocurrencies are not legally recognized as currency in the country, Bithumb decided to contest the high tax bill in court.

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