According to South Korean media Hanguk Kyungjae, the country’s right-wing political party proposed to postpone the implementation of the tax system on cryptocurrency income for three years to 2028, saying that it was worried that investors would withdraw from the market. Previously, the implementation of the tax system had been delayed twice.
South Korea’s National Power Party proposes delaying implementation of crypto profits tax
According to information on the website of the South Korean National Assembly, South Korea’s right-wing political party (National Power Party) proposed on Friday (12) to postpone the tax on profits from cryptocurrency for three years, from early 2025 to 2028.
The website points out in the reasons for the proposal that the law divides income generated from the transfer or sale of virtual assets into other income to promote fair taxation between physical assets such as cash and real estate and virtual assets such as cryptocurrencies:
However, since virtual assets are high-risk assets and have a higher risk of loss than ordinary assets, and the current investment sentiment in the virtual asset market has gradually deteriorated, it is expected that most investors will withdraw from the market if income tax is imposed.
It added, “According to this, the virtual asset income tax originally scheduled to be implemented on January 1, 2025, may be postponed for three years to January 1, 2028.”
It is reported that the virtual asset income tax system was launched in December 2020 and was originally expected to be implemented in 2022. However, it was postponed due to the need to establish supporting measures and strong opposition from investors and industry insiders.
In February this year, the National Power Party, to which current President Yin Xiyue belongs, promised for the second time in the general election to postpone the encryption income tax, saying that it was worried that it would cause burdens on investors and market chaos.
(South Korea’s ruling party plans to postpone crypto taxes as a campaign promise for the April congressional election)
Today, the implementation of the tax system is far away.
South Korea’s Ministry of Finance: Still undecided on whether to postpone
However, according to local media Bloomingbit, South Korea’s Ministry of Economy and Finance has yet to make a decision on the matter:
We have not yet made a decision regarding the postponement of the implementation of income tax on virtual assets and cryptocurrency.
It is reported that the authorities are expected to announce new tax law amendments at the end of this month, and may provide a detailed public explanation on the matter at that time.
Hanguk Kyungjae said in the report that another postponement of the encryption tax system may be inevitable:
More than half of cryptocurrency investors are in their 30s and 40s, and their influence on public opinion is very high, and almost all politicians are aware of this.
Active crypto market in South Korea
As one of the largest and most active cryptocurrency markets in Asia, South Korea has always been widely known among insiders as a "big country for speculating on small coins."
According to a survey report on the domestic cryptocurrency market in the second half of 2023 released by the South Korean Financial Services Commission (FSC), the country’s total transaction volume for the year reached 4.8 billion U.S. dollars, and the number of cryptocurrency users has reached 6.45 million, accounting for approximately The country’s population is 12.9%.
(Don’t want to lose to South Korea! South Korea Financial Commission: There are as many as 6.45 million crypto asset users, and 70% of investments are less than US$800)
In this regard, the South Korean Cabinet approved the Implementation Regulations of the "Virtual Asset User Protection Act" last month, which will take effect on July 19, clarifying the definition of virtual assets, user asset storage methods, monitoring of unfair transactions and non-public important information disclosure and make detailed specifications.
(South Korea approves virtual asset user protection law: 70% of exchanges keep cold wallets, and insider trading will be criminally liable)
This article South Korean authorities intend to delay the implementation of crypto profits tax until 2028: Worried investors will withdraw from the market first appeared on Chain News ABMedia.