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South Korea’s National Tax Service (NTS) is pressing ahead with a framework to enforce taxes on cryptocurrencies including bitcoin.

Run under the purview of Korea’s Ministry of Strategy and Finance, the National Tax Service is tasked to assess and collect internal taxes in the country. As South Korea emerges among the world’s leading bitcoin and cryptocurrency trading markets, the tax authority is pushing ahead with a plan to impose an income tax and a transfer income tax on cryptocurrencies.

According to a Business Korea report, the plan to impose taxes was discussed during yesterday’s 2017 National Tax Administration Forum, an event sponsored by the NTS. Kim Byung-il, professor of economics and taxation at Kangnam University addressed “various taxation issues” including the legal classification of cryptocurrencies to “determine whether or how much to impose taxes like a value-added tax.”

The academic, speaking at the forum co-hosted by Korea’s National Tax Administration Reform Committee and the Korea Institute of Public Finance, called on the government to “thoroughly” examine the legal status of cryptocurrencies and their taxation in other countries, adding:

[T]he government needs to specifically set up a detailed tax standard and introduce the [cryptocurrency] exchange registration system and identification system in order to prevent tax evasion.

The report also cites an NTS official stating that the authority is “considering an improvement in [tax filing] systems”, a move that would make compulsory the submission of cryptocurrency transactions in any business.

The NTS official stated:

The basic principle is to tax the income. It is important to collect detailed history data like who made transactions and how in a bid to impose taxes. To this end, we are considering the improvement in systems.

As reported last week, South Korea’s financial regulator is close to issuing final regulatory drafts for bitcoin and cryptocurrency exchanges that would mandate them to function under specific guidelines.

Featured image from Shutterstock.

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Posted by Samburaj Das