The Ministry of Strategy and Finance in South Korea announced to impose tax on cryptocurrency exchange, including a 22 percent income tax in addition to a 2.4 percent local income tax. Consequently, this will give rise to a tremendous amount of tax liability to the digital currency exchanges.
The digital currency taxation is the follow-up of the anti-money laundering investigation into six preceding banks in the country, which revealed a dramatical swift upward trend in commissions from cryptocurrency exchange accounts. Alongside the tax measure, it will be mandatory for the cryptocurrency exchanges to release users’ transaction data with banks to the tax authorities for tax collection, and banks have to introduce this system simultaneously by February, according to a finance ministry official. In addition, the use of anonymous virtual accounts as well as new virtual accounts have been prohibited, with juveniles and foreign traders being banned from exchanges transactions.
This proposed tax rate on virtual currency exchange is of the same level as its domestic corporate income tax rate for companies with annual income over 20 billion won ($18.7 million), and it could trigger tax liability equal to the amount of $56million to Bithumb, the biggest exchange in the country, based on the company’s latest financial data released. But South Korea is not the only one to target cryptocurrency transactions. Early this month, Slovakia also indicated its plan on digital platform tax and virtual currency.
With the fast growth of China’s economy and the continuous improvement of the comprehensive strength of domestic enterprises, as well as the implementation of the “One Belt, One Road” policy, an increasing amount of Chinese enterprises are beginning to expand their global footprint and establish their presence in Europe.
TPA Global has developed a practical roadmap of 6 steps meant to guide CFOs in their Journey of rising above troubles to reach a situation of full control. These steps are presented in a series of short video clips (3-5 minutes):