Korea proposes 20% tax on crypto trading starting 2021 - page 4.

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Quote from: tippytoes on July 21, 2020, 08:46:01 PM

I think 20% tax is high considering that a lot of countries are still enjoying free tax from crypto trading. But maybe, there are benefits among SKoreans?? Watching how SKoreans here will react to this news...

Tax is always required for anything that the government regulate, so I think the government would not come up with that rate without considering all the necessary factors as a basis. 20% is not a burden, or should not be burden because AFAIK, taxes are only impose on profit from trading.

This is the highlight from the link in the OP.

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Only those earning more than about $2,000 per year will be subject to this tax assuming it passes.

Kakmakr

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It is typical of what is happening in other countries too... they see it is becoming a trend world wide and they know it is the future, but they do not want it to be favored over traditional Fiat investment options, so what do they do?.... The allow it, but they put a heavy tax burden on it to reduce the possible gains and the interest in this as a trading tool. Roll Eyes

Why can they not just be open-headed like the Japanese and just allow it to flourish? It is political decisions like this that are killing global economies. Roll Eyes

(Bitcoin is legal tender in Japan)

slapper

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This is not bad at all. At least the Korean government has agreed that the cryptocurrency is a real asset bringing benefits to not just the investors but also to them. This regulation will make bitcoin becoming more legal in particular. In general, Korea is one of the strongest countries in Asia. This move will be witnessed by other countries and they might see cryptos with the same eyes as the Korean.

However, 20% on crypto trading is extremely high by the way. Although there are many advantages we can gain when the law is passed, this high tax rate might put investors in worry and frustration. Many will choose the way to abandon crypto trading and run back to their old business.

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7,387 people have signed the petition

Lower the tax rate will increase the happiness to everyone and make trading activities in Korea become stronger. I hope that they will reconsider this amendment before it will get passed. Discrimination is being put on crypto trading since, until 2023, a new law will have been passed on the stock market

leea-1334

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It is not bad at all,,, I think I already saw this news though and I commented that it sounds like a really low price for tax if I am honest. Imagine if I manage to get my 1 BTC safe and Bitcoin hits 100,000$! I would be SO happy to pay 20,000$ as tax and happily keep the rest free and no need to worry. Good rate I must say.

Strongkored

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I am not a Korean citizen but a 20% is quite high, the good one is that the Korean government sees that crypto will be something bigger than now so they taxes crypto.
In my opinion it could be that if this works to increase the country's income then other countries will follow the same steps by taking taxes instead of banning cryptocurrency in their countries

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Quote from: livingfree on July 22, 2020, 05:51:31 AM

Quote from: erikoy on July 22, 2020, 04:20:54 AM

At least that Korea started to embrace cryptocurrency. There is a high chance that it could be integrated to other services.

Yes, we can take that as positive news in a way for making the adoption better in South Korea.

Well, if the citizens would be good with that, there must be no problem to look at. Maybe if the rate of South Koreans earning more than the minimum threshold, they will modify it and increase the minimum threshold per year.

They just want a part of your profits and it seems they are proposing tac only for crypto trading so this is not going to help in the adoption only people have to pay profits to their governments.And as others said the threshold amount should be increased $2000 is really low amount to pay 20% if your taxes.

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Quote from: erikoy on July 22, 2020, 04:20:54 AM

At least that Korea started to embrace cryptocurrency. There is a high chance that it could be integrated to other services.

Yes, we can take that as positive news in a way for making the adoption better in South Korea.

Well, if the citizens would be good with that, there must be no problem to look at. Maybe if the rate of South Koreans earning more than the minimum threshold, they will modify it and increase the minimum threshold per year.

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Quote from: TNA on July 21, 2020, 08:36:09 PM

20% on gains, minimum threshold is $2k/year, filed under income tax, starting October 2021.

Not bad at all. That's the maximum rate on long term capital gains in the US. Short term gains can be taxed as high as 37%.

Quote from: The Sceptical Chymist on July 21, 2020, 08:44:50 PM

Not sure what the rationale is behind hitting crypto owners harder than people investing in the stock market, but then again a lot of decisions made by government committees don't make a hell of a lot of sense anyway.

Probably for the same reasons Fincen and the FATF subjected crypto to much lower reporting thresholds vs. traditional banks and money transmitters. For one thing, that's the general direction things are headed: as new laws are passed they are only going to become increasingly rigid, regarding reporting and compliance requirements. The other thing is that crypto really lends itself to tax evasion since it can circumvent third parties who are normally pressured into reporting on or withholding from their customers. Lower thresholds mean more prospective tax evaders will show up on the tax authority's radar.

Quote from: The Sceptical Chymist on July 21, 2020, 08:44:50 PM

It seems really strange to me that news stories like this are appearing over 10 years after the creation of bitcoin. It amazes me that there are still governments (and not just Korea's) that haven't completely figured out to handle cryptocurrency from a regulatory standpoint. It's still like the wild west sometimes.

Just goes to show you that governments really do move at a snail's pace.

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Quote from: The Sceptical Chymist on July 21, 2020, 08:44:50 PM

Not sure what the rationale is behind hitting crypto owners harder than people investing in the stock market

One possibility is that their aim is to dissuade people from getting involved in crypto by making the stock market more appealing. Perhaps in an attempt to protect citizens from scams and extreme volatility in an unregulated market. No evidence for this though, just speculating.

Quote from: The Sceptical Chymist on July 21, 2020, 08:44:50 PM

It seems really strange to me that news stories like this are appearing over 10 years after the creation of bitcoin. It amazes me that there are still governments (and not just Korea's) that haven't completely figured out to handle cryptocurrency from a regulatory standpoint. It's still like the wild west sometimes.

I think a lot of governments didn't really understand it, and hoped it would just go away. Obviously that's not happened, and as the amount of money in crypto grows, governments are being forced to face it. The fact that there is such wide variation between jurisdictions on not only what taxes to apply but also, fundamentally, on what bitcoin 'is', suggests that there is still a lack of understanding, and that new definitions and laws are required to meet this new technical innovation.

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Unfortunately, I couldn't read what the "capital gains tax law" is in order to properly understand what the cryptocurrency tax debate is really about. I guess they finally considering this because of the not-so-wealthy cryptocurrency traders who earn from trading cryptocurrency in the country?

erikoy

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At least that Korea started to embrace cryptocurrency. There is a high chance that it could be integrated to other services.

Here in our place cryptocurrency is still not that known though it is already integrated. Their is an app already with crypto available to buy. It has been put to good news like being able to pay bills, buy pre paid load or for internet connection and could be also use for trading if one want to do it by himself.

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Quote from: glowing10 on July 22, 2020, 12:36:59 AM

Looks good if considered that it is not considered as capital against tax which was likely to be considered.

Point is there in case it won't be something like that.

Quote from: glowing10 on July 22, 2020, 12:36:59 AM

So assuming 20% is a decent as now there is a proper regulation and understanding among the people that on 20% needs to be paid as tax.

Citizen of south Korea understand what this implemented tax being place
from their crypto assets and trades.

Quote from: glowing10 on July 22, 2020, 12:36:59 AM

Some countries might have cheaper than this and some countries may have more tax on crypto depending upon their government rules.

Depending from countries who already accept and embrace this industry,
we know that it's only few countries who
are adopting and accepting this market and in terms to south Korea where
they really one of those who completely adopt.

Quote from: glowing10 on July 22, 2020, 12:36:59 AM

Also, up to 2k profit per year is not taxable which is also a good thing for part time earners.

Wondering how this can be implemented, in case most of those holders and traders
declared that they are only gaining less than 2k.

romero121

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Governments are against cryptocurrency, because they weren't able to tax the transactions. How Korea government gonna collect the data on transactions. With the growing technology even on the traditional system loop holes were found and people are enjoying tax exemption. With bitcoin transactions things can be done in a anonymous manner knowing the end to end users. Already several countries have done it, and now it's the turn of Korea to tax cryptocurrency trading.

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Quote from: glowing10 on July 22, 2020, 12:36:59 AM

Looks good if considered that it is not considered as capital against tax which was likely to be considered. So assuming 20% is a decent as now there is a proper regulation and understanding among the people that on 20% needs to be paid as tax. Some countries might have cheaper than this and some countries may have more tax on crypto depending upon their government rules. Also, up to 2k profit per year is not taxable which is also a good thing for part time earners.

First of all, South Korea is one of the few countries that have fully legalized and regulated the cryptocurrency trading. The situation there is much better, when compared to other countries such as China and India, where the cryptocurrency users have to undergo all sorts of harassment and vilification. The 20% tax rate is quite decent in my opinion. Even in the United States, the long-term capital gains tax is somewhere in the vicinity of 20% (it used to be 15%, but then Obama increased it in 2013).

joniboini

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Not surprising considering they have a records of taxing a lot from their citizens[1]. Well, I guess if that means better public facility then everyone is okay with that.

Quote from: teosanru on July 22, 2020, 12:04:30 AM

Stock markets will always get advantage over cryptocurrency in eyes of authorities. But yes taxing cryptocurrency is still a mystery. Governments need some chunky mechanism to do so.

I don't really know how personal taxing works there but I bet most of the time they will depends on individual conscience to actually report their income. Or, just straight up collect data from every centralized exchange on their territory and then links every user with real identity.

[1] https://tradingeconomics.com/south-korea/personal-income-tax-rate

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Looks good if considered that it is not considered as capital against tax which was likely to be considered. So assuming 20% is a decent as now there is a proper regulation and understanding among the people that on 20% needs to be paid as tax. Some countries might have cheaper than this and some countries may have more tax on crypto depending upon their government rules. Also, up to 2k profit per year is not taxable which is also a good thing for part time earners.

Vishnu.Reang

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This is as good as it can get. The proposed 20% tax rate is much lower, when compared to the same for the other countries. On top of that, small-scale traders who earn profits up to $2,000 per year doesn't have to pay any tax. This has to be one of the most encouraging news to appear here since the start of this year. But then, I hope that this law won't be changed further, because South Korean government has a habit of backtracking on their promises.

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Quote from: The Sceptical Chymist on July 21, 2020, 08:44:50 PM

I don't live in Korea, but I find this interesting nonetheless.

The disgruntled citizens have a good point with this:

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Their argument is that stock market gains carry a minimum threshold of about $16.5k while the proposed minimum threshold for cryptocurrency trading is only about $2k. Furthermore, the stock market tax will be applied in 2023 whereas the crypto tax would start next year if passed.

Not sure what the rationale is behind hitting crypto owners harder than people investing in the stock market, but then again a lot of decisions made by government committees don't make a hell of a lot of sense anyway.

It seems really strange to me that news stories like this are appearing over 10 years after the creation of bitcoin. It amazes me that there are still governments (and not just Korea's) that haven't completely figured out to handle cryptocurrency from a regulatory standpoint. It's still like the wild west sometimes.

I think it's because stock markets and people investing in stock markets actually circulate in their home Economy. The one who buys the security on stock exchange provides liquidity on the stock exchange of that country while coming to cryptocurrency chances are trading in cryptocurrency you would throw up the currency outside of your country. This makes currency weaker. Stock markets will always get advantage over cryptocurrency in eyes of authorities. But yes taxing cryptocurrency is still a mystery. Governments need some chunky mechanism to do so.

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I think it seems like a lot of benefits for South Korea Everyone will be able to use cryptocurrencies free of charge Fiat has increased the circulation of the tax because it is supported by the government as a currency. It will make much better decisions and increase investment in the stock market The value of the transaction will increase.

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Quote from: The Sceptical Chymist on July 21, 2020, 08:44:50 PM

I don't live in Korea, but I find this interesting nonetheless.

The disgruntled citizens have a good point with this:

Not sure what the rationale is behind hitting crypto owners harder than people investing in the stock market, but then again a lot of decisions made by government committees don't make a hell of a lot of sense anyway.

What I understand is that the government determined that the minimum threshold is proportionally the same. If they matched the thresholds, then they wouldn't get anything from crypto traders. If they made the crypto threshold 16k, then the stocks threshold would have to be around $128k. Bear in mind the gov have raided exchanges in korea so many times I'm sure they scooped up second and third cooked books to determine real transaction values.

Topic: Korea proposes 20% tax on crypto trading starting 2021 - page 4. (Read 521 times)