Feb 19, 2024

South Korean Government to Delay Crypto Tax for 2 Years as Elections Approach

South Korean ruling party pledges 2-year delay for crypto tax as elections loom

The People Power Party Pushes for Delay of Crypto Gains Taxes in South Korea

The ruling party in South Korea, the People Power Party, is making efforts to postpone the implementation of crypto gains taxes for another two years. This move is part of their campaign promises for the upcoming general election in April.

According to the Herald Business Daily, the party believes that establishing a general framework for crypto is crucial before imposing any taxes. They argue that taxation should only be considered once this framework is in place.

A representative from the party also emphasized the need to establish a tax base for crypto. Unlike the stock exchange, there is currently no entity responsible for overseeing crypto transactions. The party believes that it will take two years to establish such a system. The ruling party official also stated that taxation should protect the country’s assets and its citizens’ lives, noting that some aspects of the government have neglected the crypto market so far.

The plan to tax crypto trading profits was initially announced in January 2021. Under these rules, crypto investors who earn gains of over 2.5 million won (approximately $1,900) in a year will be required to pay a 20% tax. This threshold is significantly lower than that of stocks, where gains over 50 million won (approximately $37,400) are taxed.

The implementation of the crypto gains tax has faced multiple delays over the years. Initially, the plan was to implement the tax in 2022, but lawmakers agreed to push it back to 2023 due to flaws in the National Tax Service’s information-gathering procedures.

In July 2022, government officials announced another postponement of the 20% tax on crypto gains, this time for two years. The reason given was the stagnant market conditions within the crypto space, with Bitcoin (BTC) trading at around $20,000 and later dropping to $16,000. The government also stated the need for additional time to prepare measures to protect investors.

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