South Korean news agency Yonhap reports that, today, the Government decided to tax cryptocurrency exchanges, using the following scheme:
- 22% corporate tax
- 2.4% local income tax
This is in line with the current taxing strategy used for other types of activities. According to Yonhap:
Under current laws, all corporations with income of over 20 billion won (US$18.7 million) are required to pay 22 percent and 2.2 percent of corporate and local income taxes on their income.
Markets reacted sharply to the news, sending the majority of the tokens in red.
Let's see how this unfolds.
After all, it's just Monday. If past is a good predictor of the future, by the end of this week will see the losses covered and another pump will keep us glued to the monitors for the entire weekend.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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I am afraid that the Indian government may soon announce these similar tax structures.
nice, now maybe we can see decentralized exchanges pick up growth.
24% that's simply huge! Why they are taking so much? I know this is basic taxes but from a field where the government did not took any money, now it will be collecting millions. It is simply not fair, and it does not look at all as a free market. Maybe money will be migrating to decentralized exchanges and soon people will start buying goods directly with crypto. When this will happen, nobody will need the government.
I beg to differ. 22% seems like a bargain for S. Korean companies. United States Corporations pay an average 39.6 percent.
With taxation, the exchanges get to stay open instead of outright ban AND the gov't just legitimized crypto-currency exchanging as a business. This is really great news. These exchanges will fill the sting initially, but they're insanely profitable as it is, so I imagine they'll continue to be profitable or will pass on the new burden to the trader in terms of fees. Which might dampen trading volume somewhat, but which might also bring price of Bitcoin in line with the rest of the world.
Speaking to the decentralized exchanges argument. I, too, cannot wait for them to become a reality as they will completely change the landscape. But they're still a ways away from being truly decentralized and scalable and resilient. Cobinhood is a good example of the challenges such exchanges faces to establishing a footprint and then going fully decentralized. So, in the meantime, governments finding ways to work with crypto-currency businesses is good for all concerned.
Could just be propaganda.
This is really a Good News! Now cryptocurrency trading is legal in South Korea as they are collecting taxes on it... Things will be stable very soon..
The exchanges will probably just raise the trading fees to offset the hit from these taxes. I guess the consumer gets the shaft in the end, as always!
Great point! We should push that as the story!
How much do a South Korean investor already has to pay in income taxes on crypto gains? I guess international users will also have to pay for that.
So, what I am getting from this, only the exchanges are going to pay taxes. This will probably increase fees, which are, I assume the only thing that could be taxable.
Hopefully that ends the FUD.
Hopefully. Also, we should see more decentralized exchanges popping out.
I guess some exchanges will move out of South Korea.
they did the same thing here in Colorado with Marijuana. As long as South Korea is interested in regulation and not destruction then the tax can good be a good starting point to legitimize the currency. Lets not forget that South Korea is heavily influenced by western economic power so this could be a beta test for what is to come in the US. "Hit them high and settle in the middle" works in regulations. This sucks for the average person trying to make a business out of it but that is the point of regulation. I'm not saying I'm happy about it but I could have been worse.....
reckon what would happen if a country were to be friendly to crypto?
no taxation for example...and no regulation?
I guess that is only on their profits right? They make a sh*load of money anyway. This is a good thing. The space needs to grow up.
I suppose it makes sense if that's the same as other South Korean business taxes. Seems like it would be difficult to expect cryptocurrencies to become a "mainstream thing" and at the same time expect to get a free pass from having to deal with mainstream laws.
2.4% tax is not too bad hopefully will see a rally soon
This is just a clear sign that exchanges will remain in the country, the authorities are just trying to regulate their taxes just as any other business.
What worries me is the dependency we have on the asian markets. Every time some "bad" news appear from the Chinese or Korean markets, all cryptos go down. I hope that eventually the volatility gets reduced as the market starts reacting less and less to the same kind of news. Right now, every time any asian news and media publishes some rumour, the markets react bearish short term, no matter if the news are real or not.
While it's true that Asian markets have generated dips in the markets with each episode of "bad news," have you noticed that the impact gets less and less each time? This Korean news barely bumped the market compared to the news of China banning ICO's.
Now that they tax it and thus became less risky because they regulated it, more people will probably try their thing on the crypto market.
Nice slam there at the end, yet so true! Perfectly sums up where my last few weekends have gone and why.
Thanks for the update. We are going to through so many of these over the next 4-5 years. Let's all buckle up and HODL ON!
I guess the market is going to stabilize as this somewhat shows that crypto is legal in South Korea!
The market is going to boom again,though now those taxes will be levied by the exchanges to the crypto traders in terms of increased fees!
Honestly I figured that the tax would be higher. Obviously people will react negatively to taxes on our currency, but it was bound to happen.
Seems much more simple than what they are trying to do in the US.
Time for cryptos to find a tax haven ! (-:
In a way it is pretty great news but the tax amount is kinda huge !
Hope all the things settle down for now !
I'm in agreement. By mid-week everything will stabilize, and with any more South Korea FUD unlikely following this we could get a sustained rally into the weekend. Of course there are plenty of other governments that could chime in and add to the downside pressure. Always interesting in the crypto space.
Hope this will not have a very big effect on us
-cheers-
Yeesh, 24.4% seems pretty high to me.
Why does all the bad crypto news always come out between Monday and Wednesday, seems to be long-term trend.
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Nice post and interesting information. I liked it.. Thanks for sharing information to us @dragosroua
Is this propaganda or real news?
looks legit, or at least the source is reputable
I guess we'll have to see what happens. It seems like there is a lot of propaganda going on with bitcoin.
It Amazing.. vote me please
Justo cuando el SBD iba subiendo :c
really its a informational post.thanks for sharing.
After all the fees this tax comes like the last nail, I don't think it will pass there.
Okay... I’m excited who will do the next step on this way to mass hysteria. Maybe I‘m just being paranoid but I have some bad feelings there‘s something big incoming.
Another hammer on cryptos damm that's a lot of money coming in the form of tax
the market has to go red after that well its all going down
nice tool thingy ma-giggy !
voted as witness by lucy reloaded (my g/f) - I' do the witness thingy later.
Very handy tool!
I have heard from a crypto contact I have in Germany that South Korea regulations have done little to slow down the enthusiasm for the desire to have demand of the products in general. Next step is for governemnts to go over the bigger names marketing these products. Medium to big names in the crypto game will be silenced and shut down. They did is mortgages, real estate, financial advisors and insurance agency's. Crypto is about to be beat down by big brother. Not all bad, just apart of the process. The SEC has already sounded this warning this week by warning crypto companies not to cash in on the name, "blockchain." Get your popcorn ready and be SMART!