South Korea plans to advance cryptocurrency taxation to 2023, and Upbit, Bithumb, etc. are required to set up a virtual asset taxation system

On the 21st, according to a report by Korea Economic TV, the Ministry of Planning and Finance and the National Tax Service of South Korea contacted the top five local cryptocurrency trading platforms (including Upbit and Bithumb) and 31 cryptocurrency-related companies last weekend to request the establishment of a virtual asset taxation system.

These institutions are required to provide transaction details including the type, quantity, price, and handling fee of virtual assets. At the same time, the trading platform must submit a plan on how to share virtual asset information and promote the transaction data system within one month.

The report mentioned that the Korean Ministry of Planning and Finance and the National Taxation Office will give feedback after these companies submit the system plan, which is expected to be officially used next year. At that time, the National Taxation Office will receive and collect information from this virtual asset taxation system .

In July, South Korean authorities unveiled the Tax Reform Act 2022, delaying the implementation of the 20 percent cryptocurrency tax until 2025. However, the sudden news made local operators worry that the time was too short. After all, there is only more than one month left before 2023, and they raised questions that the industry generally recognizes that the time point is 2025, and the reason for the postponement on that day also indicated that The tax is not yet ready, and the market is full of various variables. If the tax is suddenly changed to start from next year, since the detailed standards of the tax collection system for various businesses have not yet been determined, great confusion may arise.

Lee Jang-woo, adjunct professor at Hanyang University’s Global Enterprise Center, said, “Taxation is necessary, but it should be fair and correct when it is done. When taxes are suddenly imposed, investors move virtual assets from domestic exchanges to riskier ones.” The number of foreign exchanges may increase, and the competitiveness of domestic cryptocurrency-related businesses is also likely to be weakened.

It was reported last week that, affected by the Luna incident and the bankruptcy of FTX, regulators emphasized the need to strengthen the supervision of digital assets at the South Korean National Assembly, and planned to formulate a comprehensive regulatory framework “Digital Assets Basic Act”, which will be submitted to the National Assembly in the previous The 13 cryptocurrency legislative proposals drafted on the basis of the United States are expected to be submitted to Congress for consideration next year.

Lee Myung-soon, deputy director of the Financial Supervisory Service (FSS) of South Korea, said at the meeting, “As the global economic contraction has led to a decline in the asset market, Terra-Luna, Celsius, FTX, etc. have closed down one after another. year.”

Kim So-young, vice chairman of South Korea’s Financial Services Commission (FSC), added that given the urgency to protect users, it is better to develop a minimum regulatory framework and supplement it as needed, rather than wait for a comprehensive regulatory framework, saying that the FTX crisis It shows that a regulatory mechanism needs to be established to prevent insider trading and ensure that virtual asset service providers fulfill their obligations to protect user assets, while service providers should be prohibited from issuing tokens.