Cryptocurrencies could be taxed

Cryptocurrencies could be taxed

By Roberto D. | CryptoFarm | 2 Jun 2020

The world of cryptocurrencies is seen by most as a kind of far west in which one gains (or loses) everything without accounting for the state about the payment of taxes.
However, many governments are considering strategies to make money from this growing market, today we are analyzing the proposal of South Korea.

The South Korean government could introduce a capital gains tax (i.e. any gain obtained through trading) on ​​gains from cryptocurrencies and could reveal its proposals as early as next month.

South Korea's Ministry of Economy and Finance is seriously considering imposing the same type of tax rules on cryptocurrency earnings as it currently uses to tax lottery winnings and equity trading income.

These earnings are currently taxed on a sliding scale, at a rate of between 6% and 42%.
Let's take an example: I spend 100 $ in a hypothetical cryptocurrency (which we will call cryptostonks CPS for convenience ..), Cryptostonks increases its value by 100% and we therefore earn 100 $, according to this reasoning our actual profit will be 100 $ less a rate ranging from 6% to 42%, so we will earn an amount ranging from $ 58 to $ 94.

The ministry will likely present any changes it intends to make to the existing tax laws in July of this year. These tax changes would then be submitted to the National Assembly in September and, if approved, would enter into force 12 months later.

The same press release quotes a spokesman for the Ministry of Finance stating that

"specific details on the taxation of provisional proceeds have not yet been decided."

As previously reported, government bodies ended last month with more discussions on cryptocurrencies and it appears that the ministry - as well as others - are now reinforcing their decision to introduce taxation for cryptocurrency-related profits.

However, Digital Today cites an anonymous industry insider to give a warning that the proposals would concern the monitoring of exchanges, but they would probably only be able to track investors with very large amounts of cryptoassets.

The insider said that taxing big gains would simply

"push them out of the market".

What do you think about it? Is taxing cryptocurrencies a first step towards their regulation or is it just a way to "take away" the power of the individual user and concentrate it in the hands of the state?

Thanks for reading and see you next time!

Ps. If a developer out there has read the article and wants to develop "Cryptostonks" contact me, I already have the slogan "CryptoStonks, the currency that is not only decentralized but also stonks". Thanks a lot to everyone


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Roberto D.
Roberto D.

Born, and still living, in Italy. Passionate about cryptocurrencies since I discovered ethereum in 2016


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