Politician: South Korean Tax Authority Unprepared to Collect Crypto Taxes

Politician: South Korean Tax Authority Unprepared to Collect Crypto Taxes

The crypto tax law in South Korea is still causing controversy across the country, as an opposition lawmaker criticized the lack of resources from the local watchdog to collect these taxes. According to The Korea Times, Rep. Yoo Gyeong-joon of the main opposition People Power Party questioned the National Tax Service (NTS) for lacking an administrative infrastructure to ask for taxes on crypto gains.

In fact, Yoo accused Kim Dae-ji, Commissioner of NTS, of not having a clear answer about his view on non-fungible tokens (NFTs) on whether they should be taxed or not under the crypto tax law. “How can you say the authorities will be able to collect tax on crypto gains when the finance ministry and Financial Services Commission have yet to reach an agreement over whether NFTs are virtual assets or not? The public will not accept the government’s steamrolling tax gains if there is no clear definition for whether assets they own are taxable or not,” Yoo commented on Friday during an audit hosted by the National Assembly Economy and Finance Committee.

Moreover, the lawmaker mentioned that the Financial Services Commission (FSC) has been ‘struggling’ to provide a clear answer on the matter, implying that the watchdogs don’t have solid guidelines regarding how the crypto tax law should be applied.

Suggested articles

TeleTrade: Markets Want a Multi-Trillion Package, Not Just a Raise in the Debt CapGo to article >>

Latest Developments on Crypto Tax Deadline

Recently, Finance Magnates reported that the Democratic Party of Korea was set to delay the plans to impose taxes on cryptocurrencies gains ahead of the presidential elections next year. South Korea’s crypto tax law was introduced this year, specifically in October, but policymakers successfully postponed its enaction until January 1, 2022.

According to the new rules, the tax authorities will classify the new ruling on capital gains from crypto transactions done during 2022 as ‘miscellaneous incomes.’ That said, digital asset holdings should be reported in yearly filings starting May 2023, as they will be subject to 20 percent tax. In addition, the taxation will apply to mining operations and income from ICOs, and the new laws proposed an amendment to classify digital assets as ‘commodities’ rather than ‘currencies’.