South Korea is set to delay the implementation of its cryptocurrency gains tax until 2027.
Lawmakers argue the tax requires further regulatory refinement before it can be effectively introduced.
The country’s highly active cryptocurrency market adds complexity to implementing the proposed tax.
South Korea is poised to postpone the implementation of its planned cryptocurrency gains tax for the third time, extending the delay by another two years. This decision comes amid ongoing debates over regulatory and economic concerns tied to the fast-evolving digital asset market.
The country’s left-leaning Democratic Party of Korea (DPK) announced its agreement with the ruling People Power Party and government officials to support the delay, as reported by local outlet ChosunBiz. The proposal is expected to go to a vote in the National Assembly during its upcoming plenary session.
Initially scheduled to take effect in 2022, the 20% tax on cryptocurrency gains exceeding 2.5 million Korean won (approximately $1,784) has already been postponed twice. The latest proposal seeks to further delay the tax to 2027, citing the need for more time to refine the country’s regulatory framework.
During a press briefing, Park Chan-dae, the DPK’s floor leader, emphasized that the current plan requires additional adjustments to ensure its effectiveness.
While the tax framework initially proposed a 2.5 million won threshold for taxable gains, earlier efforts by the Democratic Party sought to increase the deductible threshold to 50 million won (about $35,714). However, disagreements over balancing tax collection with the need to foster a robust digital economy have stalled implementation.
According to CoinMarketCap, Upbit facilitated over $11 billion in trading volume in a single 24-hour period, highlighting the scale of the nation’s crypto ecosystem.
The government’s decision to delay taxation underscores the complexity of regulating such an active market while addressing potential economic and administrative challenges. The ruling and opposition parties appear united in recognizing the need for a more comprehensive approach before introducing the tax.
The proposed delay is scheduled for a Monday vote in the National Assembly. If passed, the tax plan will take effect on January 1, 2027, allowing lawmakers additional time to address industry and public concerns.