South Korean exchanges may lose their eligibility for significant tax benefits that is presently granted to smaller companies. The South Korean government on Monday proposed a revision to the existing tax law. According to the new revision, crypto exchanges will be excluded from the category of startups or small or medium enterprises (SMEs). These SMEs are eligible for claiming a tax deduction of up to 100 percent.
According to the existing tax laws of South Korea, SMEs and startups are eligible to apply for a deduction of 50-100 percent of their corporate tax or income tax in the first five years post their establishment. Later this reduction is in the range of 5-30 percent.
However, the Korean government seems to have now decided that crypto exchanges do not justify these tax benefits that are offered. The government explained that cryptocurrency transaction brokerage is not effective in generating any added value.
The government will present a draft revised bill to the National Assembly by the 31st of August for a parliamentary debate on the same. After the debate it will be decided whether and when the updated legislation would come into effect.
However, the government recently hinted that blockchain start-ups that are working on research and development may still be eligible for the tax benefits. This is, in fact, a move on the part of the Korean government’s wider push for helping emerging technologies in the country.
As reported in the Coindesk report, this news marks the latest legislative effort in South Korea with focus on cryptocurrency and tax. The South Korean government also announced in May that it would soon establish a cryptocurrency taxation system for investors in the country.
A lot of other legislative efforts to address different aspects of the crypto industry are presently in the pipeline too. A senior regulator recently urged haste over a bill that is aimed towards governing crypto exchanges.
The post South Korean Exchanges Lose Eligibility For Tax Benefits appeared first on OWLT Market.
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