South Korean government may cut tax sops for crypto exchanges

Moneycontrol News

South Korean cryptocurrency exchanges could soon end up becoming ineligible for significant tax benefits from the state.

According to a report by CoinDesk, crypto exchanges in the country have enjoyed tax cuts of 50-100 percent due to a tax law that allowed these exchanges to be listed under the category of start-ups or small and medium enterprises (SMEs).
On Monday, the South Korean government announced that crypto exchanges would now be excluded from this category. Under the new norm, they would only be able to enjoy cuts of 50-100 percent for the first five years, following which they can only apply for cuts of 5-30 percent.

The government justified this move by saying that cryptocurrency brokerage is not effective in generating added value.

A draft of the revised bill will be presented to the country's National Assembly by August 31, following which it will be open for parliamentary debate. A final decision will then be made on when and whether the legislation should take effect.

Only recently, the South Korean government indicated that blockchain startups engaged in research and development could still be eligible for higher tax cuts. This move is part of the government's push for helping emerging technologies in the country.

According to CoinDesk Korea, the government announced in May that it would establish a system of cryptocurrency taxation for investors.