- The anticipated taxes on cryptocurrency revenues in South Korea will not go into effect for another two years.
- The first proposal to impose an additional 20% tax on cryptocurrency gains surpassing KRW 2.5 million (US$1,900) over the course of a year is still in effect.
- The declaration follows the country’s lawmakers’ decision in December to push back original plans to tax virtual assets until 2023.
Ko Kwang-hyo, director of tax policy at the South Korean Ministry of Economy and Finance, announces that the country would delay the 20 percent cryptocurrency tax for two more years.
The government has chosen to postpone for two years the taxation of virtual assets, which was scheduled to take effect on January 1, 2023, as per the “2022 tax reform bill” cited by Newsis on the 21st. The taxation of virtual asset income as well as income from the “transfer or loan of virtual assets” will be postponed until 2025.
The absence of an investor protection system, according to the government, served as justification for delaying taxation. The “Luna event” in May caused losses for a number of investors, and it was noted that varied actions were taken at the time by local virtual asset exchanges, which increased the size of investors’ losses. The environment of a stagnating virtual asset market was also given as an explanation for the delay in taxes.
The Ko declaration was incorporated into South Korean President Yoon Suk-economic yeol’s plan roadmap. Ko had previously stated that the crypto tax should not be implemented until enough market infrastructure is in place.
The “Digital Asset Framework Act,” a virtual asset industry rights corporation, is anticipated to be put into effect in 2025 when taxes officially kick in. The US virtual asset-related regulatory study, which will be released in October, will be cited by the government as it begins to really prepare for the legislation.
The “Digital Assets Basic Act,” according to the blueprint, will regulate cryptocurrency issuance and listing.
According to a statement from the finance ministry, the Yoon Suk Yeol administration also wants to lower the top corporate tax rate from 25 percent to 22 percent.
Comprehensive real estate taxes will be substantially returned to their pre-2018 levels, and the tax exemption for a household owning just one home will increase from 1.1 billion won to 1.2 billion won.
Netizens are arguing that this move from the Republic of Korea is very clever as They suspend taxes when everyone is in the grip of a recession and a crypto early fall.