A proposed revision to the existing tax law, announced by the South Korean government on Monday, would exclude crypto exchanges from the category of startups or small and medium enterprises (SMEs) that can claim a tax cut of up to 100 percent.
Under the existing tax law in the country, startups and SMEs are able to apply for a deduction of 50–100 percent of their income tax or corporate tax in the first five years after their establishment, and 5–30 percent thereafter.
A draft revised bill will be presented to the National Assembly by Aug. 31 for parliamentary debate before a decision will be made on whether and when the updated legislation should take effect.
That said, the government recently indicated that blockchain startups working on research and development could still be eligible for tax benefits – a move that is part of the government’s wider push for helping emerging technologies in the country.
The news marks the latest legislative effort in South Korea that takes a focus on cryptocurrency and tax. The government also announced in May that it would soon establish a cryptocurrency taxation system for investors.
Various other legislative efforts to address aspects of the crypto industry are currently in the works too, with a senior regulator recently urging haste over a bill aimed to govern exchanges.