As per the local media reports, South Korea is looking at taxing the income on crypto mining operations and Initial Coin Offerings (ICO). 

Unlike other countries, South Korea is making its move towards making crypto trading a legitimate operation. That being said, the South Korean Ministry of Strategy and Finance proposed a report this week, seeking authorities to employ taxation for income from bitcoin mining operations and Initial Coin Offerings (ICO). However, it notes that the Ministry will announce the proposed amendments in July. They will then submit an amended report to the national assembly in September this year. 

With that, the major market players including exchanges, token sales, trusts, wallet companies are expected to comply with new regulatory measures as soon as the law comes into effect, which is expected to take one and a half years. Moreover, businesses dealing in cryptocurrency would require to hold an Information security management system (ISMS) certification. 

However, it's worth adding that the transactions between cryptocurrencies won’t be taxed. Interestingly, any tax on loss-making transactions will also be not taxed, a system much similar to tax provisions in securities laws. On the other side, they are looking at taxing the incomes generated from selling cryptocurrencies. An official said that; 

“We are reviewing capital gains tax or other income tax on profits gained by domestic and foreign investors in the transfer of virtual assets, adding; “The proposed tax amendment will be announced in July and submitted to the regular assembly in September,” 

Moreover, the official also noted that the planned changes have been prompted by the idea of applying “tax where income is located”. 

South Korea is constantly making a positive move, encouraging the digital asset industry in the country. In fact, in March this year, the Parliament passed a bill, legalising crypto trading in South Korea.

Comparatively, the US, Germany, Japan treats crypto gains as taxable income whereas Singapore is a step ahead, it applied a value-added tax (VAT) to crypto transactions. However, only if the authorities pass the proposed bill, South Korea will apply the standard of taxation on income from crypto mining and ICO.