South Korea To Levy Taxes as High as 24.2% on Cryptocurrency Trading
Hot news for cryptocurrency investors… fresh from South Korea, where it is Monday morning…
* As this is breaking news, this page is currently undergoing editorial revision. The gist is that exorbitant tax rates will be levied on cryptocurrency trading.
The government’s net profit of the domestic virtual currency exchanges, which earned astronomical amounts due to the transaction fee of the virtual money boom last year, will be taxed at a rate of 24.2% including 22% corporate tax and 2.2% local income tax.
According to an official from the Ministry of Strategy and Finance, “In December, the virtual currency exchange will have to pay corporate tax by the end of March for the profits, excluding expenses, from profits earned in the business year attributable to the 2017 fiscal year.”
The virtual currency exchange also has to pay local income tax, which is 10% of corporate tax, by April 30th.
Regarding the profits earned by corporations last year, the corporation tax rate is applied before the reorganization of the rich tax system.
As a result, companies with corporate tax rates exceeding 20 billion won will be subject to the 22% tax rate. The revised corporate tax rate will be divided into three sections: 10 to 30 million won, 10 to 200 million won, 200 to 20 billion won, and 22 billion won.
If you add the local income tax, which is 10% of the corporation tax, you get the highest tax rate of 24.2%.
According to the securities industry, the commission income of one of the three major exchanges in Korea, which was one of the three major exchanges, was estimated to exceed W300bn last year.
According to the Financial Investigation Report released by Bithumb, Bithumb’s sales reached 49.27 billion won by July of last year, and commission income is 49.23 billion won.
Based on this, applying a net profit of 79.3% to total sales last year, the net profit of last year will exceed 250 billion won.
If you apply the corporate tax and the local income tax rate of 24.2%, it is estimated that they will pay about 60 billion won of tax.
It is noteworthy how much tax they will pay for the Upbit (1st place), CoinOne (11th place) and Korbit (17th place), which are other domestic currency exchanges do.
According to the website CoinMarketCap, which compiles quotes and transaction volumes of major exchanges around the world, Upbit’s 24-hour turnover as of 5:30 pm on January 21st is 4,048,666,880 The dollar was the world’s number one record.
The second place was Bithumb ($ 3,916,965,000), the 11th Coin ($ 455,620,000), the 17th Korbit ($ 175,542,880) Respectively.
“Although the tax base and the net profit do not match exactly, the highest tax rate based on the tax rate before tax reform is likely to apply,” an official in the taxation department said.
The total number of corporations in Korea is 590,000, and the actual corporation tax is 330,000. As of the end of 2016, there are only 77 companies with a market cap of KRW 300 billion or 0.01 ~ 0.02% of the total.
The tax rate applied to the virtual currency exchange can rise further in the future. As for the net income earned from this year, the highest tax rate applied to companies over W300bn will rise from 22% to 25%.