South Korea to postpone Crypto Tax bill to 2027

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As a seasoned crypto investor with roots deeply embedded in South Korea’s bustling digital asset market, I must admit that this latest development brings both relief and uncertainty. Relief because the postponement of the 20% crypto tax for another two years offers more breathing room for us traders to navigate the volatile market without the added burden of excessive taxes.

Regulators in South Korea have decided to delay the implementation of a 20% cryptocurrency tax for two years. This decision was made after they turned down a suggestion by the Democratic Party to increase the yearly tax exemption limit from 2.5 million won to 50 million won.

As an analyst, I’m sharing information based on reports from Money Today: At a recent press conference, the Democratic Party’s floor leader, Park Chan-dae, disclosed that our party has consented to delaying the crypto trader tax for another two years. This means the original 2025 bill is now set for implementation in 2027.

Park stated that a greater level of organizational readiness is required within the government before it can commence systematically taxing crypto traders on a consistent basis.

Following extensive talks regarding delaying taxes on digital assets, Park expressed his opinion that this moment presents an opportunity for further structural changes within our institutions.

On December 2, 2024, the National Assembly will cast their votes regarding the future of South Korea’s cryptocurrency taxation plan. Both political parties have reached an accord to delay the implementation of this tax.

At first, the Democratic Party (DP) was against the People’s Power Party’s proposal to delay the implementation. Instead, they advocated for the crypto trading tax of 20% to be enforced in January 2025. Moreover, the DP also suggested increasing the annual tax exemption limit from 2.5 million won ($1,781) to a much higher figure of 50 million won ($35,633).

However, the government opted against the main opposition party’s plan, choosing instead to support a PPP-proposed motion that postpones the crypto tax implementation until 2027.

Moreover, Park indicated that there’s potential for further discussions about the thirteen bills put forth by the government, which encompass the crypto tax bill, inheritance bill, and gift tax bill among others. In other words, the 20% tax on cryptocurrency traders with profits exceeding 2.5 million won could potentially be adjusted.

According to Park, if no action is taken by the government, a more significant decrease could be achieved through the updated plan, which adjusts the existing reduction strategy.

For the third time now, the South Korean government is considering pushing back the enactment of their virtual asset tax legislation. Originally proposed in December 2020 and initially planned for as early as 2021, the bill was already delayed until 2025. However, it appears highly likely that this date may be extended yet again, to 2027.

Under this legislation, profits surpassing 2.5 million Korean Won (approximately $1,781) will be subject to a base tax rate of 20%, along with an additional 2% local tax. This means that excess profits will be taxed at a combined rate of 22%.

Numerous prominent cryptocurrency trading platforms have voiced their objections to the proposed 2.5 million won limit, contending that imposing a 20% tax on the base exemption amount could significantly decrease trading activity levels.

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2024-12-02 11:13