According to The Block, South Korea’s ruling National Power Party submitted an amendment to the cryptocurrency capital gains tax, proposing to postpone the taxation of cryptocurrency for three years. If the proposal is passed, cryptocurrency capital gains originally scheduled to be implemented in 2025 The tax will be deferred until 2028.
The description of the amendment on the website of the Korean National Assembly points out that if the tax system is implemented in the current market environment, it may have a serious negative impact on the market:
"The current sentiment among cryptocurrency investors is generally negative. If the country imposes income tax on this asset, which is riskier than stocks, it is expected that most investors will withdraw from the market."
According to reports, the bill was originally planned to impose a 20% capital gains tax on cryptocurrency gains on January 1, 2022, but the tax policy has been delayed twice due to strong opposition from investors and industry experts. Implementation is currently scheduled to begin on January 1, 2025. According to local news reports, South Korea’s Ministry of Strategy and Finance said it has not yet made a decision on whether to further delay the cryptocurrency tax regime. The department plans to announce new amendments to the tax code at the end of this month.
South Korea is one of the largest and most active cryptocurrency markets in the world. According to the Financial Services Commission, approximately 6.5 million South Korean citizens used cryptocurrencies as of the end of last year, accounting for 12.5% of the country’s total population. According to data from Kaiko, in the first quarter of 2024, the South Korean won even surpassed the US dollar to become the most used fiat currency in cryptocurrency transactions.
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