South Korean Ministry of Finance and Russian Tax Authority successively implement tax plans for cryptocurrencies

According to South Korean media reports, an unnamed government official stated that the South Korean Ministry of Economy and Finance is planning to impose a 20% capital gains tax on cryptocurrency exchanges. Although the Ministry of Economy and Finance has not confirmed its tax plan, government authorities are likely to implement it.

The official stated that the South Korean Ministry of Economy and Finance recently reviewed the country's tax system, and authorities may categorize profits from cryptocurrency trading as "other income" rather than "capital gains." If ultimately classified as other income, the National Tax Service (NTS) of South Korea could levy taxes on these earnings. The official noted:

The Ministry of Economy and Finance has not confirmed its direction yet, but profits from cryptocurrency transactions are more likely to be classified as other income rather than gains from capital transfers like real estate.

In fact, the South Korean government is quite proactive regarding the cryptocurrency industry. Earlier reports from ABM suggested that the Fourth Industrial Revolution Committee in South Korea recommended allowing financial institutions to introduce cryptocurrency-related products, such as Bitcoin derivatives, as part of a medium- to long-term strategy to formalize the cryptocurrency system.

Russia's New Prime Minister Calls for Taxation of Cryptocurrency

According to a report, Russia's new Prime Minister Mikhail Mishustin is a former tax official of the Russian Internal Revenue Service. After taking office, he publicly expressed his desire to tax all businesses related to the use of cryptocurrencies.

In an interview with the news media RBC on January 16, Mishustin stated:

I am convinced that it is necessary to tax such operations and correctly assess any economic consequences of using cryptocurrencies.

In fact, Russia was once a hotbed of cryptocurrency fraud. During the ICO boom in 2017, Russian participation in cryptocurrency ICOs accounted for 10% of the global market. Anti Danilevski, founder of the cryptocurrency exchange KickEx, commented:

I believe the arrival of the new Prime Minister Mikhail Mishustin can strengthen further protective measures for cryptocurrency investors and businesses in Russia, making their current work crucial.

Further Reading

• Small Crypto Transactions Tax-Free! U.S. Legislators Push for Cryptocurrency Tax Reform
• U.S. SEC: Telegram Token Issuance Was Only a Financing Means Due to Fund Shortage

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