South Korean crypto exchanges may soon lose the right to substantial tax benefits granted to small companies. This is reported by CoinDesk.
The government of South Korea proposed to revise the tax legislation and, in particular, to exclude the crypto exchanges from the category of start-ups or SMEs. The latter have the right to reduce taxes up to 100%.
So, according to local laws, start-ups and SMEs can apply to the authorities for a discount on income or corporate tax of 50-100% during the first five years of business existence. Five years later, small companies can also apply for a tax preference, but already at a rate of 5-30%. It is unknown can local minners be affected with this decision.
However, the government decided that the provision of preferences to crypto-currency platforms is inappropriate. According to officials, "crypto-currency brokering is not an effective source of creating added value."
The draft amendment to the legislation will be submitted for discussion to the National Assembly on August 31. However, under any scenario, benefits will be provided to start-ups, which are focused on research and creating new products. Thus, the government of South Korea is trying to stimulate the development of new technologies in the country.
In general, in South Korea, there is a clear tendency to tighten the regulation of the cryptoindustry. So, the other day the local Financial Services Commission urged the National Assembly to enact laws urgently strengthening the exchange of digital currencies.