South Korea's right-wing political party has proposed delaying the taxation of cryptocurrency earnings for three years. If this law is passed, the country's taxation on crypto earnings will be shifted from 2025 to 2028.
In the draft law on the website of the South Korean National Assembly, it is stated that “In the current situation, the sentiment of crypto investors is negative; Therefore, if the country imposes income tax on assets with higher risks, many investors are expected to leave the market.” The bill was proposed last Friday.
The 20% tax on crypto earnings was originally planned to go into effect on January 1, 2022, but due to reactions from investors and industry experts, this date was postponed twice and most recently extended to January 1, 2025.
South Korea's right-wing People Power Party, to which current President Yoon Suk-yeol belongs, promised to postpone the crypto profits tax in the last general election.
According to local news sources, the country's Ministry of Economy and Finance stated that it has not yet made a decision on additional crypto tax-related delays. The ministry plans to announce new changes in the tax law at the end of this month.
South Korea is home to one of the largest and most active cryptocurrency markets in the world. According to the Financial Services Commission, approximately 6.5 million citizens (12.5% of the country's population) were using crypto at the end of last year. According to Kaiko data, the most preferred fiat currency for crypto trading in the first quarter of 2024 was the Korean won, surpassing the US dollar.
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I EXPLAIN IN DETAIL.
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