Cryptocurrency profit tax in South Korea has been delayed by another 2 years
The Democratic Party of Korea (DPK) has just agreed to postpone the implementation of the digital asset profit tax until 2027, marking the third delay since this plan was announced in 2021. Previously, the tax was expected to be implemented from 2025.
Reasons for tax postponement
• Politics and investor interests: The DPK initially opposed the tax postponement, arguing that it was a "political trick" by the ruling party (PPP) to attract voters. However, after much debate, both sides agreed that early tax implementation could drive investors away from the market.
• Increased tax threshold: Previously, the DPK proposed to only tax profits over $36,000, instead of $1,800 as originally stipulated, to reduce pressure on retail investors.
History of delays
• The cryptocurrency tax was initially scheduled to be implemented in 2021 but was postponed due to strong reactions from the cryptocurrency community.
• After several changes, the tax has been pushed back to 2023, then 2025, and now to 2027.
Consequences of implementing taxes
After implementation, cryptocurrency investors in South Korea will have to pay a 20% tax on profits from digital assets.
Impact on the market
This tax postponement decision may encourage capital inflow into the South Korean cryptocurrency market, facilitating development and attracting new investors. Coins like Bitcoin ($BTC ) and Ethereum ($ETH ), which have high trading volumes in South Korea, are likely to benefit significantly from this policy.