On December 1, 2017 the National Tax Agency released a statement relating to regulation of blockchain titled “Tax Calculations on Cryptocurrency Investments.”

How regulation of blockchain system will work

Tax is charged if:

• Converting cryptocurrencies into a legal currency
• Purchasing items with virtual currency
• When virtual currency is exchanged for another virtual currency
• Regardless of how assets are stored.

Under current tax laws, tax is not charged for holding cryptocurrencies. If sold or exchanged, however, up to 55% tax may be charged, calculated proportionately to value. Furthermore, future legislations may see “20% tax on assets considered shares.”

Below, quoted from the National Tax Agency HP regarding the regulation of blockchain:

In principle, profits arising from selling or using virtual currency such as Bitcoin are classified as miscellaneous income unless taxed as business income (requires income tax filing).

Losses arising from the calculation of the amount of miscellaneous income can not be totalized with other income.

Cryptocurrency acquired via mining is subject to business income or miscellaneous income taxation. The calculation of profit is as follows: profit – necessary expenses = taxable income

A version of this article originally appeared in Token News.