South Korea Plans to Introduce Capital Gains Tax On Cryptocurrency in 2020

As per the recent developments, South Korea is planning to introduce tax on cryptocurrency capital gains by 2020, reported The Korea Times. The publication mentioned that the Ministry of Economy and Finance will push this measure to reflect in the tax regulations for next year.

One of the ministry officials read: "Related discussions have been taking place. The revised bill will be drawn up by the first half of next year.”

In addition to this, the Korean National Assembly is supposedly working on a bill that focuses on introducing more transparency in digital currency trading. The Korean government is pushing these steps as it plans to increase overall transparency in the process of trading cryptocurrencies.

Now if the regulators announces taxing cryptocurrencies with the usual capital gains taxation approach, the local traders will need to supply a detailed report and history of their crypto trading deals. Besides, crypto trading platforms and exchanges will have to keep separate records of users’ personal information and their trading details.

Most of the existing cryptocurrency exchanges already have a KYC procedure in place for significant amount of coins traded. Over the last two years, the Korean government has already made it mandatory for crypto users to submit KYC information. This allows them to link their crypto exchange accounts to their banks and thus directly trade in Korean won.

South Korean investors have been the key contributors in the cryptocurrency market. During the crypto bull run of 2017, the Korean interest was at peak with billions of dollar worth cryptocurrencies traded by Korean investors.

However, it has also resulted in major market manipulations and other illegal crypto activities after which the Korean regulators stepped in an introduced strict measures. Since then, the Korean government has brought a number of regulatory measures to bring transparency and establish a fair system in the local crypto market.

But with the new measures, the Korean interest in the crypto market has been diminishing in 2019. There is lower activity seen in the Korean market at this stage.