South Korea is preparing a tax on the use of Bitcoin after the volume of cryptocurrency trade soared. Han Seung-hee, the country's National Tax Service commissioner, told lawmakers this weekend that the issue of how to make the best tax emergency for the digital currency is being discussed, including the areas of capital gains taxes, VAT, and gift taxes.
South Korean lawmakers held a joint hearing with the National Tax Service (NTS) in Sejong on 13 October. NTS commissioner Han Seung-hee answers questions about digital currency taxation, especially about bitcoin.
Bussiness Post then asked a question to NTS Commissioner:
"Because the daily transaction value of virtual money continues to grow, we must actively address the shift in value. What is the tax plan to be done for this virtual currency? "
"I'm still talking about business income, and I'm discussing whether to impose value-added tax or capital gains tax in regards to virtual currency like Bitcoin," Han Seung-hee replied.
According to Han, it is currently discussing the issue of VAT and capital gain tax with the Ministry of Strategy and Finance. In addition he said that "the gift tax will be reviewed as it needs to be completed". The Commissioner indicates that the use of Bitcoin may serve as an excuse to avoid the gift tax, therefore assessment methods need to be applied in relation to the granting of taxes on the granting of digital currency as a gift.
Meanwhile, he confirmed that they are currently monitoring the status of the transaction (cryptocurrency) and will set policy as soon as possible.
Han also mentioned that the United States is actively responding to virtual money taxation as an asset and the profits from their transactions are taxed. "We must be proactive like the United States and Japan," he said.