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15/07/24
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People’s Power Party in South Korea Takes Step to Postpone Crypto Tax
The People’s Power Party in South Korea has taken steps to delay the implementation of tax on profits from cryptocurrency trading. Three days ago, the ruling party submitted the proposal, noting a decline in the current sentiment toward cryptocurrency assets.
As described in the official proposal, the rapid imposition of taxes on virtual assets is “not advisable at this time,” arguing that the risks associated with cryptocurrency are higher relative to stocks. Hence, imposing income tax may push investors out of the market.
The authorities were supposed to implement the tax on crypto gains on January 1, 2025, but an approval of the new proposal will postpone the implementation until January 1, 2028.
The ruling party had promised to ensure the postponement of the implementation while campaigning prior to the general election which took place three months ago. In February, the party’s argument expressed the need to establish a general cryptocurrency framework prior to implementing taxation. The People’s Power Party said there should be a full establishment of a base framework before the government starts taxing cryptocurrency.
Furthermore, according to a representative, the authorities have not mandated any entity to oversee cryptocurrency asset transactions. Hence, it is believed that using two years for the development of such a system is the best.
The Korea Economic Daily’s report revealed that the South Korean government first planned to implement a tax on crypto gains three years ago, but they decided to suspend it until 2023 due to the backlash from crypto space stakeholders.
Investors across the country are required to pay a 20 percent capital gains tax if their yearly gains are more than 2.5 million won. However, when it comes to stocks, they are only required to pay tax on gains more than 50 million won.
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