South Korea is launching the first spot market for gold, in an effort to eliminate underground transactions in gold and boost revenue from tax. The spot market is open to any qualified gold dealer such as an importer or a wholesale or retail distributor of gold. If an individual wishes to trade in gold through the spot market this will only be possible if the transaction is done through a qualified dealer.
It is estimated that more than half the gold traded each year on the local gold market changes hands illegally and this results in the evasion of large sums of tax. By ensuring that transactions are legal the government is aiming to increase tax revenues from gold transactions. Gold transactions through the Korean exchange will be eligible for a reduction in tax. For an initial period there will be an exemption from import duty for exchange traders and if the trader does not receive a physical delivery of the gold there will be an exemption from the 10 percent value added tax.
