Cryptocurrency exchanges in South Korea might quickly lose eligibility for consequential tax benefits recently granted to smaller companies.
A proposal of revision to the current tax law, previously announced by the South Korean government, would remove crypto exchanges from the category of startups or small and medium enterprises (SMEs) that could claim a tax decrease of up to 100 percent, reported CoinDesk Korea.
Following the current tax law in South Korea, startups and SMEs could apply for a cut of 50–100 percent of their income tax or corporate tax in the first five years after their organization, and 5–30 percent thenceforth.
Nevertheless, the government might have decided that crypto platforms do not legitimize the benefits, spelling out “cryptocurrency transaction brokerage is not effective in generating added value.”
A draft revised bill will be proposed to the National Assembly by the end of Aug, 2018 for parliamentary debate before a decision will be finalized on whether and when the updated legislation should take consequence.
The government lately expressed that research and development blockchain startups could still be eligible for tax benefits, which was a move that the government advanced for developing emerging technologies in the country.
This news was one of the latest effort of lawmaking in South Korea that took a concentrate on cryptocurrency and tax. As reported by CoinDesk Korea, the government also announced in May, 2018 that a cryptocurrency taxation system for investors would be soon established.
Many other lawmaking efforts to focus on aspects of the crypto industry are in process by an attempt from senior regulator.
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