Regulation
South Korean Ruling Party Considers 3-Year Grace on Crypto Taxes
A local news publication in South Korea recently reported that the current ruling government is considering postponing the implementation of crypto tax for an additional three years. Thus, instead of January 2025, the Korean government won’t tax crypto capital gains further until January 2028.
Crypto Tax Relief to South Korean Investors Likely
Crypto taxation has been a matter of strong discussion in South Korea, originally started in 2021, after passing the related tax law in the National Assembly during the Moon Jae-in administration. Later, they further postponed the decision to 2023 considering the presidential election in the following year, and further to January 2025 under the Yoon Seok-yeol administration.
Some have criticized that the public opinion of the taxpayers largely influences the crypto tax policy in South Korea. In May 2024, the Financial Services Commission (FSC) presented data showing that the total number of crypto investors in South Korea has shot up by 6.45 million.
With the falling Bitcoin price and strong correction in the broader crypto market, there’s growing dissatisfaction on issues related to crypto taxes currently in South Korea. One of the market insiders told Hankyung publication:
“The daily cryptocurrency trading volume on domestic exchanges, which was in the 20 trillion won range in March, has recently plummeted to the 2 trillion won range. If the cryptocurrency income tax is imposed early next year, most investors will leave, further reducing trading.”
Also Read: India to Present Union Budget On July 23, Will Crypto Investors Get Tax Relief?
Income Tax Postponement Gains Momentum
Interestingly, the scheduled investment of financial investment income tax is also facing delays in South Korea. Despite the government’s announcement to abolish the tax, former Democratic Party of Korea leader Lee Jae-myung stated on the 10th of this month that “we need to think more about the timing of implementation.”
Now, if the crypto tax proceeds while there are delays in the financial investment tax, investors might feel disadvantaged. Critics argue that full-scale taxation of cryptocurrencies is impractical due to insufficient system and institutional preparation. One of the government officials said: “Secondary legislation is needed to classify cryptocurrencies and specify the types of business within the industry in detail so that taxes can be levied without difficulty. The institutional arrangements are not yet sufficient.”
However, some of the opposition leaders have countered saying that the lack of preparation from the government shows that they didn’t do what was necessary to implement crypto taxes. Also, they added that public opinion is getting too much importance in implementing crypto tax rules.
Also Read: Bitcoin User Sends Inscription “Taxes Are Robbery” To The German Government
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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