South Korea Reportedly Plans to Hit Bitcoin Exchanges With Massive Tax Bills
South Korea’s government is hitting the country’s cryptocurrency exchanges with massive tax demands, in its latest attempt to rein in the booming and volatile sector.
According to a finance ministry official, cited in a Yonhap report on Monday, South Korean cryptocurrency exchanges will this year need to pay 22% corporate and 2.2% local income taxes on last year’s earnings by the end of March and April respectively, if they had an annual income of over 20 billion won ($18.8 million) during 2016.
The report suggested that the Bithumb exchange, for example, would need to pay around 60 billion won for its earnings during last year.
On Sunday, Yonhap quoted another official as saying cryptocurrency exchanges would soon be required to share users’ transaction data with banks—another move that would help the authorities collect tax.
South Korea’s ongoing cryptocurrency crackdown has been one of the prime causes of bitcoin’s recent volatility. Last month, the government instituted real-name policies for virtual-currency traders and banned investors from opening new accounts.
The chair of the country’s Financial Services Commission told the parliament on Thursday that the government was still considering shutting down all local cryptocurrency exchanges, or at least those that have been breaking the law.
Nonetheless, the value of bitcoin has remained relatively stable in recent days, at around $11,500.