The National Statistical Office of South Korea has announced that it will add cryptocurrency to its annual household finances report. The data will help in its effort to tax the crypto market starting from 2023.
The South Korean statistics bureau has added cryptocurrency to the annual household finances reports — one step in bringing taxation to the asset class. Local media outlets reported the development on Jan 23, saying that the country’s National Statistical Office was making the addition in a bid to track household finances jointly with the Bank of Korea and the Financial Supervisory Service.
The agency wants the data to better help make decisions related to taxation. South Korea is yet to impose taxation on the asset class, but it is well on its way to doing so. 20,000 households will initially be examined, though the data will not be made public.
The National Statistical Office also said that it had not determined the status of cryptocurrencies as assets, i.e., whether they should be clubbed as financial assets like stocks, bonds, and real estate. The head of the Welfare Statistics Department at the National Statistical Office, Im Kyung-eun, said,
“Once we start this year’s investigation and accumulate data, if there is an international agreement on which assets should be included in virtual assets.”
South Korea has been debating the implementation of a crypto tax for years. While it is certain that taxation on the asset class will happen, how and when is as of yet undecided. There has been a lot of back and forth on the matter, with the tax rules now delayed to 2023.
South Korea’s regulation efforts moving forward
When it comes to regulation, South Korea is among the most active nations. The country’s authorities have taken numerous steps to rein in the market, and for the most part, it has worked.
The biggest development in recent years is the fact exchanges must now have a license to operate. Several exchanges have been forced to shut down as a consequence. Regulators also banned privacy coins like Monero and Zcash from 2021.
Still, crypto volumes and general activity have been strong. South Korean banks reported a 100% increase in crypto transaction fees in Q2 2021. Taxation will likely bring relief to many investors as they prefer regulatory clarity over anything else — and indeed, capital gain tax for crypto has received majority support from its citizens.