South Korea’s tax authority has announced that it will tax crypto gifts and inherited tokens. However, taxes must be paid in fiat with complicated-sounding methods. Seoul also stated that it will increase its efforts to combat crypto market manipulation.
According KBS , and The Donga Ilbo National Tax Service(NTS), the nation’s top tax body has announced that citizens will have to pay tax from January 2022 on crypto they inherit or are gifted. The National Assembly has recently delayed crypto trading profits, so investors will not be taxed until 2023.
The NTS announced the addition of a new tool on its website to assist taxpayers in fulfilling their legal obligations for crypto gifts and inheritances. The widget will allow people to calculate the amount they owe taxman if they receive a crypto windfall.
To calculate the fiat value of a token donation, the tool will use data from the “big four” cryptocurrency exchanges – Upbit and Bithumb. Instead of using crypto prices at the time that tokens are received or inheritance, citizens will have to use the tool in order to calculate a two-month average price. NTS is concerned about token prices being volatile and may be worried that smart investors might seek out gifts at low prices to avoid paying high taxes.
The body didn’t specify the exact time period that these average prices would cover but it seems likely that they will cover the month prior to receipt as well as the 30-31 day period following.
The South Korean government is also trying to clamp down on cryptocurrency market manipulation. The government unveiled last month a draft bill that would allow for life sentences for high-level fraud involving manipulation of token prices.
Per iNews24. The Financial Services Commission and the Personal Information Protection Committee met this week to “check the compliance of virtual asset service providers [VASPs]” with the newly enacted Virtual Asset Industry Act.
According to the government, “suspicions of unfair trading practices by some virtual-asset business operators in relation to the listing virtual assets” were raised and it was “necessary respond.”
Parties agreed to intensify their monitoring of “unfair practices” and to follow up with “legislative assistance” to “regulate or punish” any potential offenders.