South Korea discuss the possibility to give crypto a legal status

[hatshepsut93]

No government can simply pass by some economic activity and do nothing - they either ban it or regulate it and make people pay taxes. You can try arguing for lower taxes or more relaxed regulations, but there's no way you can convince government to leave crypto away. If you're so worried about taxes, try finding some legal loopholes - maybe you won't have to pay taxes if you use crypto as currency, so you can hodl and spend it instead of selling on exchanges.

[hello_good_sir]

I don't think the people that weren't taxed when they used, got paid or invested in crypto are really expecting the government to let this slide constantly.

It won't increase trading volumes or anything, but it still is a payment method and if they really want to use blockchain technology and build a crypto-country, legalising and recognising certain crypto currencies are actual payment methods and should be taxed is a tough pill to swallow, but one that needs to be done.

[kryptqnick]

I seriously doubt an online petition is going to change the minds of the politicians in south korea...about anything.

This surprised me that crypto isn't taxed there.  Does that mean you can earn bitcoin and not have to pay taxes on it?  Crazy if that's the case, because I think such a situation has always been taxable in most countries ever since bitcoin was created.  If you acquire crypto without actually buying it, that's the *definition* of income, and if it gains in value before you end up selling it, that's the definition of capital gains.  So if s. korea isn't currently taxing crypto income or gains, they're just behind the times in my opinion.

I don't know, in my country, although democracy here is far from perfect, there are official petitions to the president as well as to the parliament, and if they reach a certain amount of people who sign them over a certain period of time, they are officially considered by the authorities and an official response gets published. They can be pretty effective. Anyway, making cryptos legal sounds like a good thing, this will mean protection and safety for people who're doing business with it. But as for taxation, I think the most logical with is to apply a progressive income tax to cryptos, just like to other forms of income. I hope that if cryptos become regulated in South Korea, that'll be the choice of the authorities. But we gotta understand that the govs cannot pretend like people are not using cryptos forever, they have to regulate them in some way. So it's better to push for favorable regulations rather than for no regulations at all, I think.

[BlackFor3st]

Currently, crypto is NOT taxed in korea. If they do this, it most likely WILL be taxed in korea.

Please everyone, for the sake of me, let’s all sign a petition to stop the Korean government from doing this to ME and everyone like me. This will not raise trading volumes on korean exchanges and will only hurt those invested in crypto in korea.

Damn you Korean government! Damn you all to hell....!    Source: http://www.thebchain.co.kr/news/articleView.html?idxno=5981

Sometimes acceptance will bring also different disadvantages and one of it is the tax that will definitely favor the government while lowering the income of the traders as the fees of the exchange will surely increase.

Legality is good so we don't need to hide from the governments but our freedom will be ruined as the government will surely create new laws that will help them to monitor all the crypto users in the country and tax all of them in every transaction that they will make. I am not that sure whether filing a petition will help the traders in Korea as it is very difficult to fight a government if you have no solid partners to push through the petition.

[kooboat]

Should crypto become a legal tender in  any country like South Korea then it is most likely that there is also the possibility that it would come with some regulations or legislations which includes a tax component. Signing an online petition would only help bring some sort of sensitization but the final decision lies with the  government.

[vintages]

The truth is the petition won't do much.
I am not trying to be a deal breaker or bad news breaker nor refusing to see the better side of it. But most governments bearly care about petitions signed by the citizens online. When they have set their mind to to influence certain decisions, they do it. And this also apply to the case of digital currency.

[TimeTeller]

Currently, crypto is NOT taxed in korea. If they do this, it most likely WILL be taxed in korea.

Please everyone, for the sake of me, let’s all sign a petition to stop the Korean government from doing this to ME and everyone like me. This will not raise trading volumes on korean exchanges and will only hurt those invested in crypto in korea.

Damn you Korean government! Damn you all to hell....!    Source: http://www.thebchain.co.kr/news/articleView.html?idxno=5981

Just a mere online petition is not going to make any difference and please help me understand if everyone adopts crypto and uses it to pay their bill, service providers and business then government is losing out on tax as it's as simple as tax evasion just because you are using crypto as a mode of payment. I think it's our duty to pay tax if we are earning through crypto as well and fall on the slab of taxable income.

The OP should be grateful and enjoy the situation as long as the SK government has not implemented their regulations yet.
We are already heading to the scenario of having crypto as legal tender and actually been on the works in several countries already.
So no matter what, we will be heading to this situation. It is only a matter of time when those governments will finally give the regulations on how to deal with cryptocurrencies.
And giving crypto as a legal status has some benefits to crypto users. But of course, one consequence is paying tax out of it.

[diahsw]

I don't think Korea is like that, there are some countries that have even more stringent regulations for crypto currencies, so I think only we can arrange for everything to run smoothly, because changing the government is not as easy as just making a petition.

[Shasha80]

I really understand the situation of South Korean citizens towards the government, but making a petition won't have any effect
towards the South Korean government's decision. Moreover, the petition via online, actually with a situation like this must be
thankful by the citizens of South Korea because the government does not prohibit cryptocurrency. Even though later it will be taxed.
Compared to many other disadvantaged countries, the government still prohibits its citizens from dealing with cryptocurrency issues.

[pixie85]

No government can simply pass by some economic activity and do nothing - they either ban it or regulate it and make people pay taxes. You can try arguing for lower taxes or more relaxed regulations, but there's no way you can convince government to leave crypto away. If you're so worried about taxes, try finding some legal loopholes - maybe you won't have to pay taxes if you use crypto as currency, so you can hodl and spend it instead of selling on exchanges.

But don't you think this is a little bit unfair? They are producing fiat money and making sure it's hard to counterfeit and relatively stable so they make you pay taxes for transactions in fiat.

They don't make crypto and they don't help to make it secure. They also have nothing to do with how transactions in crypto are made but they still want a share of every transaction.

I'm ok with paying taxes when I convert to fiat. I'm not ok with paying taxes like people in the USA for holding or trading for other cryptocurrencies.

I'm curious how tax laws in Korea are going to be.

[blckhawk]

As far as I know, most of the countries that has cryptocurrency activity does not impose tax because regulating a crowded, mostly decentralized altcoins and bitcoin is quite difficult. They may rely on taxing the exchanges themselves, which in turn would impose tax and higher fees to the users of such exchanges. While this may be bad, if paying tax would make these exchanges adhere to national standards in terms of security, insurance and such, and would be held liable for weakness in their platform (e.g. thefts), then maybe having tax for security isn't bad at all.

[hatshepsut93]

But don't you think this is a little bit unfair? They are producing fiat money and making sure it's hard to counterfeit and relatively stable so they make you pay taxes for transactions in fiat.

They don't make crypto and they don't help to make it secure. They also have nothing to do with how transactions in crypto are made but they still want a share of every transaction.

I'm ok with paying taxes when I convert to fiat. I'm not ok with paying taxes like people in the USA for holding or trading for other cryptocurrencies.

I'm curious how tax laws in Korea are going to be.

What do you mean by "taxes for transactions in fiat"? There are fees that are charged by banks for their services, governments don't have anything to do with it. If you talk about something like VAT, than it's a different story, but regardless whether it's fair or not, those taxes aren't just payments for using currency, they are used to fund all public stuff. So, if a country allows crypto as payment method, it would make sense that the same taxes would be applied to it.

[Kyraishi]

I'm surprised they where not taking taxes before? All the other big countries like Singapore and the US all tax from crypto earnings.

Does this mean it you get paid in crypto and convert it into your local fiat currency your basically allowed to keep it like that, without taxes? That doesn't sound very fair to be honest and this seems like a good move

[boltz]

I wouldn't be surprise at all during the fact of how fast is the pace in Asia when it comes to cryptocurrencies adoption and regulation. South Korea in the last years are climbing the mount if economical status with some crazy skills and we're taking about infrastructure, movies , jobs , cryptocurrencies, import-export so no wonder why they're about to make an official statement about Cryptocurrencies as they know for sure this will boost economy even further.

[matchi2011]

I'm surprised they where not taking taxes before? All the other big countries like Singapore and the US all tax from crypto earnings.

Does this mean it you get paid in crypto and convert it into your local fiat currency your basically allowed to keep it like that, without taxes? That doesn't sound very fair to be honest and this seems like a good move

That's also the same question in my mind right now, from where I am. the government already implementing taxes to the exchange so each time we converted our crypto to fiat it will automatically being taxed. It will will be a good indication if you will look for long term as your government is now working with crypto and seeing the possibilities to impose taxes that will be useful to your country.

[Eugenar]

I'm surprised they where not taking taxes before? All the other big countries like Singapore and the US all tax from crypto earnings.

Does this mean it you get paid in crypto and convert it into your local fiat currency your basically allowed to keep it like that, without taxes? That doesn't sound very fair to be honest and this seems like a good move

That's also the same question in my mind right now, from where I am. the government already implementing taxes to the exchange so each time we converted our crypto to fiat it will automatically being taxed. It will will be a good indication if you will look for long term as your government is now working with crypto and seeing the possibilities to impose taxes that will be useful to your country.

Not that bad either, if we will let government to tax cryptocurrency, it is much better that they create their own cryptocurrency with tax, because if they will incorporate taxes to cryptocurrencies such as bitcoin, it is not fair. Most of the time, we need these taxes, but they will take the soul of cryptocurrency such as bitcoin if they will force people to pay taxes while using it. Regarding to the topic, we all know Korea is being one of the most active adopting country to cryptocurrency. They have also good governing system, if in any case they implement such acts like this, let's observe and see how it will behave. Not all tax associated activities will bring negativity to the community.

[Murat]

We know that every country's government need money for its maintaining all over the territory, obviously, this money comes from tax and another income, so no government will give up the tax opportunity because it's the main source for them, that's why South Korea also depends on tax to run a country, In this sense, either the cryptocurrency will get in a regulation or become ban, if the government will focus on this cryptocurrency then regulation is the main tool, now you have to decide which is favorable to you, either giving tax or getting ban, I think legal status also brings some barrier towards this platform.

[millennium00]

It is a very sensitive issue because investments in cryptocurrencies can yield significant profits and governments want to pay taxes for it, in addition more control is desired for the possibility of money laundering, in the case of South Korea the good thing is that the market is quite developed, however, in other countries there are still many doubts and a clear legal framework can be favorable, however, the spirit of cryptocurrencies in terms of independence must be preserved.

[Mumbeeptind1963]

I seriously doubt an online petition is going to change the minds of the politicians in south korea...about anything.

This surprised me that crypto isn't taxed there.  Does that mean you can earn bitcoin and not have to pay taxes on it?  Crazy if that's the case, because I think such a situation has always been taxable in most countries ever since bitcoin was created.  If you acquire crypto without actually buying it, that's the *definition* of income, and if it gains in value before you end up selling it, that's the definition of capital gains.  So if s. korea isn't currently taxing crypto income or gains, they're just behind the times in my opinion.

If it happens I think there will be a good and bad advantages of it.

Good advantage:
More and more people will be aware to cryptocurrency , many traders in stock market will pay attention to crypto, they will invest and put their assets to it. Many banks will be open for crypto and they will put partnership to some coins and even exchanges. Other countries will follow what South Korea do, it could be a sign for them to legalize it too.

Down side:
Taxes and cryptocurrency regulation will be made. Transactions are now can be trace too.

[bryant.coleman]

This is old news. They have been planning this for quite some time. The government first announced that they will be ending the tax benefits for Bitcoin sometime during mid-2018. As a first step, they had made cryptocurrency exchanges ineligible for the income and corporate tax deductions, which are provided to small and medium-sized enterprises.

This was a major blow to many of the exchanges. For example, Bithumb paid 27.2 billion won as corporate tax on its net profit of 250 billion won during 2017-18. Under new rules, they are liable to pay almost double that amount (close to 54 billion won). For the past several years, the finance minister (Hong Nam-ki) had adopted a hostile stance towards cryptocurrency and I don't expect it to change anytime soon.