Active crypto dealers in South Korea said they are planned to walk away from the market forever – throwing “unfair” 20% crypto trading tax law plans revealed by the government beginning this week.
It is a sign, possibly, of what traders in other countries will have to deal with soon, with plans crypto tax laws now signifying drawn up by authorities all over the planet.
The recommendations, which will be bundled with a range of other tax reforms, are almost guaranteed to be voted into law in the next administrative gathering, which will convene in autumn. This would allow the bill to promulgate in October 2021 and will see anyone earning over around USD 2,100 in crypto trading profits obliged to cough up 20% of their earnings to the taxman.
Speaking to Cryptonews.com, Mira Kim, a South Korea-based blockchain consultant, stated,
“A lot of people really seem to think that it’s not fair, that the bar has been set too high. Stock traders, for example, are allowed to offset their tax payments for up to five years [depending on the size of their trading profits], but it doesn’t look like that will be an option for crypto traders.”
Kim added that several individuals had informed her that going from paying zero to paying 20% is just too much of a hurdle, that the government should propose taxes more lightly if it wants to make money from traders somewhat of just alarming them off.
“I don’t know if it’s just angry talk, but a couple of very active traders have told me that as of the end of this year, they will stop crypto trading for good,” Kim said.
Per Chosun, even legal specialists acknowledged that crypto traders and stock traders were “clearly being treated differently.”
Those hoping to find legal avoidances to help them avoid the taxman’s grip might also find themselves frustrated.
An unnamed lawyer told the media outlet,
“Even [folks are trying to] bypass [the tax] by using an overseas exchange will eventually have to use a fiat ramp at a domestic exchange. That process will involve clarifying how you acquired the funds.”
Finally, said the lawyer, the tax officials would be able to pick on the deal and would come with questions. Moreover, the taxman has been given the power to hit would-be crypto tax evaders with a second 20% tax bill should they fail to disclose their earnings accurately.
Tax officials might still strive to recognise and tax peer-to-peer (P2P) trading, said lawyers – a fact that could lead to a boom in harder-to-trace crypto deals.