South Korea’s Crypto Exchanges Will No Longer Get Tax Incentives and Breaks if Govt Has Its Way
Crypto Exchanges Will No Longer Get Tax Incentives and Breaks Within South Korea
Before now, any cryptocurrency exchange that was hosted in South Korea was eligible for certain benefits, since the government considered them to be under the same blanket as small businesses. However, in a revision proposed on July 30th, the new tax laws would pull cryptocurrency exchanges from these exemptions, moving them into a category for small and medium enterprises. Though they previously were giving a tax cut of 100%, but it seems that is a thing of the past.
The current laws for startups and SME’s would let them request the deduction of anywhere from 50% to 100% of their income tax. This break impacts the first five years, though the rest of their presence in the market would only give them 5% to 30%. Unfortunately, the government is still debating on the break at all, considering that cryptocurrency does not justify their benefits. They say that “cryptocurrency transaction brokerage is not effective in generating added value.”
The National Assembly will receive a revised version of this bill on August 31st, and it will undergo a debate before the government comes to a conclusion. It is only then that consumers will find out if and when the new laws will go into effect. However, despite the delays, the government implied that the crypto industry is still developing research that could help them retain their benefits. This effort coincides with the government’s support for new technology in the country, which is exactly what crypto and blockchain offer.
This new development follows the announcement from the South Korean government in May that they would have a crypto taxation system that would apply to investors. There’s still other efforts being setup in the government to make the crypto industry more regulated. There is even a senior regulator in the government that is pushing to have a bill that specifically deals with the exchanges in the country.