South Korea plans to announce Cryptocurrency Tax Plan for 2019
Following the news that Thailand is going to charge tax rates for cryptocurrency trading, South Korea has also announced a cryptocurrency taxation framework. The framework will be revealed by June’s end this year and the South Korean government expects to begin taxation in 2019.
According to an article on the website of the Financial News from South Korea, the Ministry of Strategy and Finance is considering crypto adopters’ capital gains tax and other income taxes as possible inclusions for its tax plan.
An official from the Ministry of Strategy and Finance said on the 25th:
“We do not have a specific time frame, but we are thinking about announcing a virtual money tax in the first half of the year.”
In January, South Korea’s taxation ministry has sent employees to overseas countries such as the United States, Japan, Germany and the United Kingdom to determine the current status of virtual tax currencies. According to a government survey, the tax situation of the large foreign countries is currently arranged very different per country.
Besides other proposals, the ministry is mainly focussing on the possibility of levying a tax on profits generated by the sale of cryptocurrencies.
During the recently held G20 finance ministers’ meeting (20 major countries), the time for the adoption of a global common regulation on virtual money was postponed to July. Therefore, it is expected that domestic virtual currency regulations including taxes will be adjusted accordingly.
Meanwhile, according to the Financial News, the South Korean government plans to introduce ‘full-scale” crypto regulations immediately after the local elections on June 13th.
The Ministry of Finance and Economy is holding an international financial conference on virtual exchange rates and blockchain for G20 members on the 14th
of June in Seoul and will most likely hold a second work session on the financial system of the G20 on the 15th.
European ban on binary options and restrictions on CFDs
The European Securities and Markets Authority (ESMA) has adopted measures that protect retail investors against risky investment products. The agreed measures concern a ban on binary options and sales restriction on CFDs.
With binary options, you speculate whether the price of, for example, a share or an index over a certain period, such as an hour or a week, will be higher or lower. If you guess wrong, you lose your entire deposit, while if you bet well, you only win ninety percent of your stake.
The ESMA has decided to ban the sale of so-called binary options across the European Union. It is the first time that a financial product is banned across the EU.
CFD is a financial instrument whereby two parties agree to settle the value of an underlying investment with each other at two different moments. Changes in prices of the underlying investment determine the value of a CFD. That underlying investment can be anything, including foreign currency, a stock market index or a share. A minor price fluctuation can lead to major losses as a result of the leverage of CFDs.
The product intervention measures from the ESMA include:
Leverage limits on the opening of a position by a retail client from 30:1 to 2:1, which vary according to the volatility of the underlying:
- 30:1 for major currency pairs;
- 20:1 for non-major currency pairs, gold, and major indices;
- 10:1 for commodities other than gold and non-major equity indices;
- 5:1 for individual equities and other reference values;
- 2:1 for cryptocurrencies;
As described above, the CFDs measures will be the strictest for cryptos.
The decisions regarding CFDs and binary options came after an intensive cooperation between the national supervisors of all EU member states. It is the first time that the distribution and sale of a financial product are prohibited at European level.
The ESMA may introduce measures for a period of three months. It decides before the end of that period whether the ban should be extended.
Join us on Telegram to receive free trading signals.
For more cryptocurrency news, check out the Altcoin Buzz YouTube channel.