[Global Crypto Assets & Finance Conference 2021] Tax for the virtual asset service providers and investors_Inwook Kwon, Tax Accountant

  • Global Crypto Assets & Finance Conference 2021
  • Host: Delio, Korea Crypto Finance Association (KCFA)
  • Date: January 27th — January 29th, 14:00–16:10
  • Website: https://conf.delio.io

Session 3: Crypto Asset related Systems and Regulations

▣ Tax for the virtual asset service providers and investors _Inwook Kwon, Tax Accountant

Virtual Asset Investor Tax Payment

Income from an individual’s crypto asset investment is taxable for transactions after 2022. However, non-investment activities, prizes, mining, businesses, gifts, etc., are subject to taxation even before 2022. An investor’s tax-saving point is to keep proof of the transaction.

Investing and lending to individuals

Since other personal activities can be taxed under existing tax laws, when considering whether virtual assets are taxed or not, it is necessary to distinguish between investment and other activities. Currently, only individual investment activities are tax-free, and in other cases, all of them can be taxed.

Investigating the source of funds for investors in virtual assets

The concept of the fund source investigation is the process of confirming whether the property acquisition fund was created by tax evasion, and if it is not possible to explain it to the tax office through proof, it is assumed to be a gift and tax on the gift is taxed. Usually, it occurs most often when full-time investors buy real estate.

Business wallets and overseas transactions

Virtual asset blockchain transaction details must be consistent with internal documents, accounting, and tax data managed by the company. It is irrelevant even if there is no internal document, but it is not possible to link the corporate account with the exchange wallet, and there are times when individuals such as representatives use wallets, so it is better to supplement the behavior with internal documents. In the case of crypto asset business, there may be several affiliated companies, and accordingly, the separation of wallets must be classified for each company. In addition, transactions in the wallet should be used only for business purposes, and when used in combination with personal use, there are issues of embezzlement and borrowed accounts.

Crypto assets are subject to taxation under the current tax law, and there is a high probability that a tax audit for virtual asset operators and investors will occur in the next few years. Therefore, it is necessary to prepare in advance through legal and tax experts so that there will be no unexpected tax outflow.

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