Bitcoin Forum

South Korea has confirmed that income tax cannot be levied on individual investors’ profits from crypto transactions under the current tax law. The government, however, is reviewing international trends and the approaches of major countries to crypto taxation in an effort to amend the existing Korean tax law to include cryptocurrency.

Full Source here (https://news.bitcoin.com/government-confirms-crypto-profits-not-taxable-in-south-korea/)

This is such good news for South Korean Investors being concerned and conservative on their investments for their future assets.

It could be one of the most important news thus boosting Bitcoin's price a little bit since yesterday's small drop ($6.800 ~ $7.300)

Altough it's only a temporary implementation as the government is thinking of an upcoming law to legalize it and so taxing will be imposed.

Do you think it will be good for South Korean Investors or it will make those leave as soon the law hits them?

@DreamStage this news should have a positive impact on bitcoin prices, because South Korea has a big crypto community which became inactive due to the various regulations imposed on it by their government. It’s also pertinent to note that if South Korea’s government decides to tax crypto’s income, then they’ll be compelled to accept it as a legal tender which will further fuel up bitcoin prices.


https://www.investopedia.com/news/why-south-korea-so-important-bitcoin-prices/

Agreed, this is some welcome news. Still hoping to see a little bit better outlook this year for Korean investors. I would love for the government to finally give it a little more recognition.

@the bolded is a significant part that most countries are still confused about but at the same time we have seen countries find a way around it by likening bitcoin or any profit from crypto related activities to mean commodity just like someone trading in silver or gold among others but they are not legal tender as well. The crux of the matter is whether they would be subjected to Income Tax because income tax classsification would be the reason why they might struggle with not making it legal tender but any other form of tax like Capital Gains Tax or Value Added Tax, Carbon Tax etc can be an alternative for them and they being able to still achieve their objective of revenue generation.

This untaxing is the 3rd reason I see why the price goes up suddenly today, so far this is way close to it unlike the Iran bombing. When it was announce that the government was about to take tax from crypto investors in South Korea the price also drop. Its not final since the government looks at the approach of some other countries into taxing BTC holders. What their government could come up later will still affect the price and this is to be watched out .

Its  good news for South Korean investors then. Many may benefit to it and by incorporating it to crypto currencies will definitely make it more interesting. If they are recognizing crypto then most likely they're considering it as legal medium of exchange.

I personally believe that once a modernized and legal structure is put into place, where everyone knows exactly what they are doing, people can then decide how and where to implement a crypto strategy as part of their investment portfolio. This is not just for the South Koreans, but for everyone residing in any country that is looking into this niche financial market. I think, either way, the South Koreans are deeply rooted into crypto and the Blockchain and I don't see them leaving it any time soon. Not unless there was some complete blanket ban on cryptos in their country. I think the South Koreans are quite relaxed with their legislation and most probably want to make sure they can abide by it and still profit.

It's nice that South Korea is doing it, many crypto users tries to hide their earnings and sometime do illegal transactions in area that accept crypto due to tax issues that they want to run to, but since South Korea accepting it tax free then no worries for South Korea investors whether they earn high from their investments. Wish they will be followed by other countries.

It is somehow like the issue before but the topic is reasonable because whom they will tax are the most widely used exchange in south korea, if I am an investor in south korea or even here, I think it isn't really a good way to tax our profit because it is unpredictable, we are risking allot of money here and we don't know how much we could earn or if we are about to earn at all. Taxing investors is like pushing them away to avoid investing.

Good thing with South Korea Government looks care with bitcoin and altcoin become as legal currency in their country, they have support for every one want to adopt and invest with bitcoin and altcoin during waiting with major country opinion about bitcoin become accepted and make bitcoin legal transaction or illegal transaction, but bitcoin can increase for their people capital to get much profit with investment way.

Why would the Korean government need to wait for another country to come up with a resolution on how to implement a taxation on the profit anyone makes, they need to consider this as stock investment and the tax must be according to the laws applied to stock market and if there is a temporary approach will it built a good confidence to the investors, it might in the short run as they can cash out their earning without thinking hard about filling the tax column and hope this trend will continue till the next rally so that we might see huge investments coming from Korea.

If the government comes up with reasonable law then everything will be fine and i am expecting a reasonable approach by the government rather than a rule that will literally stop the investors from making a profit.

This is great news for South Korea. I wish all countries would have more liberal tax laws concerning cryptocurrencies. It would help grow this industry.

The law is still being reviewed so there's still a chance that the rules will be change in the future. Although it is a good news that the government of South Korea taking a serious steps to amend the existing Korean laws.
More countries should follow what they did instead of absolutely banning without giving a chance to inspect or do their research about of the essence of cryptocurrencies.

I think you are mistaken VERY mistaken. Yes, they interpreted that, under CURRENT rules, they should not tax profits. Meaning, they are urged to revise said rules...

This is a temporary benefit at best, If i were Korean, i would start to move investments abroad, or accept the tax and rules as they come (might be too late by then to change mind).

In theory, the Koreans should know that, the more they tax, the less investments will remain. But politicians being politicians, you can expect anything. State rules simply tend to get in the way of wealth making "in the name of national protection" or whatever.

I think it's a great clarification, but it would be reasonable to impose income tax just like the one for other kinds of income in that country. So maybe the euphoria is temporary because obviously no taxes is more attractive than anything else tax-related  ;D I guess it's time to enjoy this situation while they still can, but I hope that this clarification is a good sign in general that even if some system of taxation is imposed, it will not be a harsh one. And I think that fighting scam is also important, so regulations should be out there. I did not understand why Bithumb had to pay, though. Maybe it's because in my country there is no tax like the one mentioned in the article.

It's a good news for them. But for sure the Korean government will immediately take actions for that because they can't just let them earn profits without the government getting taxes from it. Maybe the government just let it pass today but this celebration wouldn't last that long. Because they're still obliged to pay taxes. They won't let them escape taxation. Investors should prepare themselves I guess

Bitcoin is legal tender nowhere. That doesn't stop it being taxable.

South Korea is a closed market so the only effect it'll have on everywhere else is if they suck up a significant amount of supply. Prices have often been a grand or two above elsewhere because no foreign money can get in or out.

It's a simple economic principle to tax people of their profit but with crypto, it's much more complicated. You can't just track every transaction or take a tax on trade or withdrawal as taxing a person who is incurring a loss would not be nice.  Japan and Korea seems to be the most advanced government to accept crypto trading as a real business and I hope they'd be able to devise a way to fulfill the interest of every parties including the government.

maybe it will have an impact on the rising price of bitcoin, because Korean people might exchange their assets to crypto to avoid taxes, actually there is a way to collect taxes for crypto holders in korea, namely by providing additional tax for local exchanges there, even though it cannot get it fully at least it still exists for state income.

That can already be a good trade-off which should be taken as a positive move if ever by cryptocurrency lovers in South Korea. This country is known as one of the most important and active cryptocurrency market and things happening in this country can directly and indirectly affect the price movements of different cryptocurrency platforms. Let's hope that the government can come up with acceptable tax rate and related requirements for income derived from cryptocurrency. Of course, expecting that tax-free can be forever is not realistic as the government has the mandate to collect taxes whenever applicable.

Yeah, I also agree with that. But on the other hand we also lose the principle of bitcoin itself, which is decentralization, where when taxation about crypto is enforced, they indirectly also need to verify themselves. But I think this has become the best scenario now, rather than crypto being completely banned, at least this policy has a middle ground of crypto policy problems so far.

This would be a good spark for those aspirants who also eyeing to invest around crypto market. Taxation required information about individuals which leads the business to be more known by the government. If there's rules which allowing crypto investors not to be obliged paying for it then it will attract more supporters.

Why would they leave if they knew taxation on cryptocurrencies are out of the way? They 'might' leave, if the temporary memorandum would be ammended, stating that cryptocurrency investments would be under income tax. But the news you linked looks in the positive side, and might encourage more investors to risk/invest their money on cryptocurrencies.

This is indeed a good news but this is temporary. The laws are work in progress. They are definitely gonna come up with some or other form of taxation for the cryptocurrency profits. But until then , traders are gonna enjoy this relaxation. This might helps in bringing more people to crypto trading in Hope of saving tax over their trading profits. This in turn can boost the demand.
I always have loved how South Korea is so supportive of cryptos. They tried to bring in regulations only to support cryptos and make it fair as much as possible.

            I've heard about this news and although some are not quiet familiar about investing in cryptocurrencies, its actually good for them and for the whole crypto economy. Imagine a country supporting crypto, it would improve the community by leaps and bounds.

In the intermal process of gaining profits from investing to cryptocurrency exchanges and trading, people could be untaxable, the only way I think korea could tax their people in crypto if they decides to withdraw and exhange their cryptocurreny to fiats. Just one tip, if they could have very huge amount of crypto, why not to try to go somewhere else or othe country then thry to withdraw there? I just wonder why they need to tax investors in crypto because they might not know how much profit these people could have.

So far, the tax issue is something that makes many investors in Korea very nervous and thinking, because cryptocurrency taxes are too tightly controlled and difficult. But if South Korea implements a new policy as you propose then this is definitely good news for Korean investors, it will certainly have a positive impact on this market and there will be many investors in Korea to participate in this market in the future

South Korea looks friendly country because want accept bitcoin as legal currency and always give chance for bitcoin become digital currency payment, but not enough if one country only support for accepting bitcoin as legal currency because need many countries want to receive payment using bitcoin and altcoin.