South Korea has set June 2018 as cut-off time to come out with a taxation framework for cryptocurrencies, a month ahead of the July 2018, the deadline recommended by the G20 for own regulations for the crypto industry. The earlier idea was to levy tax under capital gains tax or other income tax.
Though the country expects to announce the taxation framework now, it will start implementing it only in 2019 after the proposal is submitted at the National Assembly in August.
The G20 communiqué of March 20 sought to come out with proposals by July 2018 for regulating the cryptocurrency industry.
The communiqué stated, "We acknowledge that technological innovation, including that underlying crypto-assets, has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly. Crypto-assets do, however, raise issues with respect to consumer and investor protection market integrity, tax evasion, money laundering and terrorist financing."
The South Korean authorities are mulling several regulatory actions to control the crypto frenzy that has hit Asia's fourth-largest economy, which has also emerged as the world's second-largest market for cryptocurrency.
The regulators have been reportedly considering a licensing system and tax for cryptocurrency exchanges as well as crypto trading. They are seeking to normalize cryptocurrency transactions, allaying previous fears of a ban on domestic exchanges and crypto transactions.
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