Crypto Tax Delay: South Koreas New Decision Puts Tax On Hold Till 2027
- South Korea pushes crypto tax to 2027, allowing traders more time to prepare for the 20% capital gains tax.
- Political opposition delays the planned crypto tax, once set for 2025, amid concerns over its market impact.
- The KDP and PPP strike a deal, postponing South Koreas crypto tax for two more years, shifting implementation to 2027.
The South Korean government has once more delayed the introduction of its capital gains tax on digital assets, further complicating the countrys approach to cryptocurrencies. The new tax was supposed to be implemented starting from January 2025, but it will be postponed until 2027 due to the current political situation in the country.
During the press conference on December 1, Park Chan-dae, the floor leader of the Korea Democratic Party, affirmed that an agreement has been made to prolong the moratorium for two more years. This decision is made amid a political deal between the KDP and the ruling Peoples Power Party (PPP), which has so far preferred a slower approach to taxing cryptocurrency gains.
Crypto Tax Timeline Shift
The delay is a major change in South Koreas approach to cryptocurrency taxation. Previous proposals had suggested that the tax should be introduced from January 1, 2025, but political pushback and worries over the effect on the market have forced legislators to rethink. Initially, the PPP had hoped for a three-year transition, suggesting to shift the tax implementation to 2028. On the other hand, the KDP had earlier also been against such a delay as the organization wanted the tax to be in place from 2025.
Even still, the KDP has now signed off on the two-year delay, with Park stating that the extra time would allow for further assessment of the potential impact of digital assets gains taxation on the market and investors. The new development means that the South Korean regulators are likely to give traders up to 2027 years to prepare for the 20% tax which will be charged on the income from virtual currency trading.
Crypto Tax Impact on Investors
This is not the first time the South Korean government has delayed implementing a crypto tax either. At first, the government intended placing the tax into effect in 2021, yet the idea encountered opposition from the digital assets community. It was mainly fear of negative impacts such as limiting innovation and pushing away investments from the local cryptocurrency market. In response, the government first postponed the tax until 2023 before again moving the timeline to 2025.
If the tax is introduced, any South Korean crypto investor will be required to pay 20% of profit from digital assets. The KDP had at first proposed to raise the tax threshold where exemptions apply from 2 million KRW or $1,800 to 50 million KRW or $36,000. The proposal focused only on the big institutional investors in order to avoid over burdening the small traders with taxes.
Read more: https://www.tronweekly.com/crypto-tax-delay-south-koreas-new-decision/
Text source: TronWeekly
