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Topic: South Korea considering cryptocurrency tax (Read 188 times)

legendary
Activity: 2044
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December 22, 2017, 10:09:59 AM
#13
Imposing taxes on capital gains from crypto for traders ostensibly would not affect whether or not an exchange charges commissions.

....

To clarify the reasoning behind me saying capital gains could affect exchange commissions. Its based on the idea that anything which makes an exchange more expensive to run, could upset their business model and force them to implement commissions on trades, higher fees and other policies to maintain profit margins.

In a broad sense, when property taxes are raised the cost is often passed on to tenants in the form of higher rent. Higher tobacco and alcohol excise taxes are passed on to consumers in the form of more expensive beer and cigarettes. Gasoline taxes are passed on to drivers in the form of more expensive gasoline.

These types of tax programs come at a cost, that money has to come from somewhere and it makes sense that the cost will be passed on to crypto traders in the form of higher commissions.

If you disagree with my reasoning, I would be interested to hear why.  Smiley

Ah, I understand a little better now, however an exchange that isn't charging commissions... what aspect of their business plan is being affected that would necessitate charging commissions now? In the other examples you listed, the tax is imposed on the business owner who passes them on to consumers.  (Raising gas taxes means the station has to pay more based on what they sell, which means they pass the cost along to maintain their margins.) In this case however, the tax is imposed on the consumers directly and bypasses the exchange. It's the same as if in your example of consumers who buy gas, their income taxes were increased. That's a tax directly on the consumer that doesn't involve the station owner, so there's no extra cost to pass along.
member
Activity: 210
Merit: 10
December 13, 2017, 11:40:29 PM
#12
That's an week old news now that South Korea is planning to implement tax on bitcoin. I am sure it is a good news for majority of the bitcoin users like me. Because once a county introduces tax on something, it is considered as legal. Also South Korea accounts for the third largest crypto trading volume, so the tax framework will surely bring positive impact on the entire crypto market. The only concern is about the nature of taxes and how it will be calculated. Once we have the detailed guideline, then only we can discuss the good or bad about it.

I also one of person who get happy know this information. Tax is no problem at least it takes in good portion.
But i dont know why in the other trade mention south korea banned bitcoin and all cryptocurrency trafing?
Which one ia true?
hero member
Activity: 1092
Merit: 501
December 13, 2017, 11:35:46 PM
#11
That's an week old news now that South Korea is planning to implement tax on bitcoin. I am sure it is a good news for majority of the bitcoin users like me. Because once a county introduces tax on something, it is considered as legal. Also South Korea accounts for the third largest crypto trading volume, so the tax framework will surely bring positive impact on the entire crypto market. The only concern is about the nature of taxes and how it will be calculated. Once we have the detailed guideline, then only we can discuss the good or bad about it.
Let us hope that the tax is fair and that is not a very high tax, if it does that could kill trading in South Korea since traders may decide to move their funds overseas to other exchanges, now the impacts can be positive as you said since this will be another signal that another asian government is looking for the integration of bitcoin in the formal economy.
legendary
Activity: 2562
Merit: 1441
December 13, 2017, 09:26:42 PM
#10
Imposing taxes on capital gains from crypto for traders ostensibly would not affect whether or not an exchange charges commissions.

....

To clarify the reasoning behind me saying capital gains could affect exchange commissions. Its based on the idea that anything which makes an exchange more expensive to run, could upset their business model and force them to implement commissions on trades, higher fees and other policies to maintain profit margins.

In a broad sense, when property taxes are raised the cost is often passed on to tenants in the form of higher rent. Higher tobacco and alcohol excise taxes are passed on to consumers in the form of more expensive beer and cigarettes. Gasoline taxes are passed on to drivers in the form of more expensive gasoline.

These types of tax programs come at a cost, that money has to come from somewhere and it makes sense that the cost will be passed on to crypto traders in the form of higher commissions.

If you disagree with my reasoning, I would be interested to hear why.  Smiley
sr. member
Activity: 644
Merit: 261
December 13, 2017, 09:22:17 PM
#9
While there are not that many people who trade cryptocurrency compared to foreign exchange and stocks yet, it is I think necessary that the government should have regulations imposed on trading cryptocurrencies and thereby levy tax upon it. There may be some people who are against it but then it is just a protection for investors and there would be more people who would join and add up to the trading volume because they will feel secure knowing that the government is already involved in it. After all, it is one of the duties of a citizen of a country to pay his due taxes in whatever income he earns and that would include income from cryptocurrency.
member
Activity: 112
Merit: 10
December 13, 2017, 09:21:42 PM
#8
tax mean income to the government
income means they considered it as legal to do
as we waiting for more details how this tax will work, so far that is good news for cryptocurrency
something that i want to know more about this tax is this tax apply for individual or corporation (exchanger)
what kind of tax? transaction tax or funding tax?
increasing in fee for transaction will make crypto out from their country btw
full member
Activity: 406
Merit: 111
December 13, 2017, 09:19:04 PM
#7
as expected, south korea nailed it, taxing bitcoin means more curious investors are eyeing this cryptocurrency thing, once bitcoin comes down to the mainstream, more and more investors will have balls to invest more because having it taxed means it is becoming legal, of course bitcoin is legal though , meaning, more exposed and blunt. by the way, we need someone to regulate bitcoin for us not come to a bubble if the price is uncontrollably high.

Isn't this already mainstream? https://www.cnbc.com/2017/12/11/people-are-taking-out-mortgages-to-buy-bitcoin-says-joseph-borg.html

Litecoin going to 400 and Ethereum going to 700 isn't because there was some flashy update
member
Activity: 378
Merit: 25
December 13, 2017, 09:08:02 PM
#6
as expected, south korea nailed it, taxing bitcoin means more curious investors are eyeing this cryptocurrency thing, once bitcoin comes down to the mainstream, more and more investors will have balls to invest more because having it taxed means it is becoming legal, of course bitcoin is legal though , meaning, more exposed and blunt. by the way, we need someone to regulate bitcoin for us not come to a bubble if the price is uncontrollably high.
sr. member
Activity: 420
Merit: 250
December 13, 2017, 08:52:36 PM
#5
This was just a matter of time. It is to be expected that sooner or later, most of the governments will address this question one way or another, since now they're getting 0 out of it and they are becoming increasingly aware that there is a lot of money they can "redirect" to their own pockets. How they are planning to make this happen remains to be seen.
full member
Activity: 252
Merit: 101
Global Risk Exchange - gref.io
December 13, 2017, 08:10:44 PM
#4
This should come as no surprise to anybody because if you think all the major governments are going to let a new asset class go not taxed you are certainly more naive than I am.
legendary
Activity: 3080
Merit: 1500
December 13, 2017, 06:49:14 PM
#3
That's an week old news now that South Korea is planning to implement tax on bitcoin. I am sure it is a good news for majority of the bitcoin users like me. Because once a county introduces tax on something, it is considered as legal. Also South Korea accounts for the third largest crypto trading volume, so the tax framework will surely bring positive impact on the entire crypto market. The only concern is about the nature of taxes and how it will be calculated. Once we have the detailed guideline, then only we can discuss the good or bad about it.
legendary
Activity: 2044
Merit: 1115
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December 13, 2017, 06:46:24 PM
#2
Quote
In Seoul, after an emergency meeting on Wednesday, South Korea’s government said it will consider taxing capital gains from trading of virtual coins and will also ban minors from opening accounts on exchanges, according to a statement obtained by Reuters ahead of its official release.

To be eligible, exchanges in South Korea will need to uphold investor protection rules and disclose all bid and offer quotes.

The measures need parliamentary approval. Seoul will maintain a current ban on all financial institutions dealing virtual currencies.

“The regulations in Korea will not have a negative effect,” said Thomas Glucksmann, head of marketing at Hong Kong-based exchange Gatecoin, adding that on the contrary, “licensing brings certainty, which encourages already regulated entities ... to get involved in addition to skeptical retail investors.”

In an interview with Reuters on Tuesday, the Seoul-based operator of the world’s busiest virtual currency exchange Bithumb, said it will fully comply with potential regulations from the South Korean government and adequately capitalize itself to protect its clients.

https://www.reuters.com/article/us-markets-bitcoin-southkorea/south-korea-considers-cryptocurrency-tax-as-regulators-grapple-with-speculative-mania-idUSKBN1E703O

....

This raises a few interesting questions.

It is known that crypto exchanges in china and south korea often do not charge commissions on trades. Imposing taxes and regulation on a crypto exchange can sometimes come with additional cost. Sometimes that cost will trickle down to consumers, which could imply that taxes will trickle down to users of exchanges in the forms of higher withdrawal fees or the introduction of commissions on trades. This could imply taxes on south korean exchanges could legitimize crypto in addition to whatever negative implications might arise as a result. Imposed taxation could cut down on the trend of exchange traders buying/selling to themselves to take advantage of zero commissions on trades.

Capital gains taxes also may not apply until crypto is exchanged for fiat(?). In equities markets, capital gains do not apply until the stock is sold which encourages long term buy and hold, rather than day trading. Not certain if similar measures might apply to btc under capital gains but it is a possibility.



Imposing taxes on capital gains from crypto for traders ostensibly would not affect whether or not an exchange charges commissions. However regulating the exchanges and requiring proper capitalization could. And in that case, I'm all for it. Every financial exchange is regulated and required to meet minimum capitalization requirements to protect investors, why should crypto be different? We've already seen the types of scams and failures that are common with a lack of regulation or oversight. My inkling is this news will be complained about by people with very little practical knowledge of how financial regulations work, but overall it's a good move.
legendary
Activity: 2562
Merit: 1441
December 13, 2017, 06:35:42 PM
#1
Quote
In Seoul, after an emergency meeting on Wednesday, South Korea’s government said it will consider taxing capital gains from trading of virtual coins and will also ban minors from opening accounts on exchanges, according to a statement obtained by Reuters ahead of its official release.

To be eligible, exchanges in South Korea will need to uphold investor protection rules and disclose all bid and offer quotes.

The measures need parliamentary approval. Seoul will maintain a current ban on all financial institutions dealing virtual currencies.

“The regulations in Korea will not have a negative effect,” said Thomas Glucksmann, head of marketing at Hong Kong-based exchange Gatecoin, adding that on the contrary, “licensing brings certainty, which encourages already regulated entities ... to get involved in addition to skeptical retail investors.”

In an interview with Reuters on Tuesday, the Seoul-based operator of the world’s busiest virtual currency exchange Bithumb, said it will fully comply with potential regulations from the South Korean government and adequately capitalize itself to protect its clients.

https://www.reuters.com/article/us-markets-bitcoin-southkorea/south-korea-considers-cryptocurrency-tax-as-regulators-grapple-with-speculative-mania-idUSKBN1E703O

....

This raises a few interesting questions.

It is known that crypto exchanges in china and south korea often do not charge commissions on trades. Imposing taxes and regulation on a crypto exchange can sometimes come with additional cost. Sometimes that cost will trickle down to consumers, which could imply that taxes will trickle down to users of exchanges in the forms of higher withdrawal fees or the introduction of commissions on trades. This could imply taxes on south korean exchanges could legitimize crypto in addition to whatever negative implications might arise as a result. Imposed taxation could cut down on the trend of exchange traders buying/selling to themselves to take advantage of zero commissions on trades.

Capital gains taxes also may not apply until crypto is exchanged for fiat(?). In equities markets, capital gains do not apply until the stock is sold which encourages long term buy and hold, rather than day trading. Not certain if similar measures might apply to btc under capital gains but it is a possibility.

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