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South Korea continues to take significant steps regarding the cryptocurrency market. According to local media, the ruling People Power Party is working on postponing the taxation of crypto investment gains for another two years and promises this development as part of its campaign for the general elections in April.
Tax Steps for Cryptocurrency
As reported by the local news agency Herald Business Daily on February 19, the ruling party will prioritize creating a basic regulatory framework for crypto before taxation and plans to propose a new set of regulations for the crypto industry in the coming period.
The country’s crypto earnings tax, initially set to start on January 1, 2023, has been postponed to January 2025. Another potential delay could push the start of the tax plan to 2027. With this move, the ruling party aims to gain a significant advantage in its election campaign.
As part of its election campaign, the ruling party is considering a new bill that includes fundamental elements for potential crypto regulations, such as requirements for crypto custody providers and token listing. The proposed regulations are expected to be added to South Korea‘s first set of crypto regulations that will take effect in July. According to the report, the party will complete its primary election promises by the end of the month.
Tax System in South Korea
Last month, a representative from South Korea’s Ministry of Economy and Finance stated that the legislative body should discuss whether to abolish the income tax on crypto assets, in line with the current administration’s attempt to introduce a planned tax on financial investments such as stocks and funds.
However, according to Herald‘s report, the People Power Party is not considering completely removing the planned taxation. In addition to the proposed delay, the party aims to align the crypto tax threshold with that of stocks. While the tax plan imposes a 22% tax on crypto gains exceeding 2.5 million Korean won worth $1,875 USD, gains from stocks are only taxed after exceeding 50 million won.
