South Korea Delays Implementation of 20% Tax on Crypto Profits to 2025
Reports indicate that the South Korean government has put off by two years the implementation of a tax of twenty percent on cryptocurrency revenues. The controversial tax on cryptocurrency income of twenty percent was supposed to go into force on January 1, 2023, but this date has been pushed back to 2025.
On July 21, the government authorities disclosed their fresh plans for tax reform, postponing the crypto tax structure until 2025 based on the conditions of a stagnant market and the time required to develop investor safety measures. The intention to levy an additional tax of twenty percent on crypto revenues exceeding 2.5 million won ($1,900) in a span of 1 year has not been changed.
Since its initial notification in January 2021, the disputed tax on cryptocurrencies of twenty percent has been deferred for the second time. The introduction of the tax was initially planned to take place in January of 2022. However, legislators in the country postponed the implementation of the tax until 2023. Furthermore, the implementation of the tax has been postponed for two more years.
Kim Young-jin, the chairman of the Tax Subcommittee and one of the MPs who oppose the cryptocurrency tax policy, has recommended the construction of effective cryptocurrency regulation prior to the implementation of cryptocurrency taxes. The newly elected President of Korea is enthusiastic about cryptocurrencies, and the country’s leaders are hopeful that this would help them take control of the cryptocurrency business and subsequently pass tax legislation.
In the last few years, the cryptocurrency business has reached heights that have never been seen before, and as a result, the government has made collecting bitcoin taxes a top priority. Thailand proposed a 15 percent tax on cryptocurrency income, which is comparable to South Korea’s intention to impose a tax of 20 percent on cryptocurrency profits. However, the proposal was faced with considerable resistance from retail traders, and the authorities were ultimately compelled to withdraw the project.
Nevertheless, the exorbitant taxing has left its mark on cryptocurrency exchanges in the nation, with transaction volumes nosediving by more than 90 percent within weeks of the adoption of the new tax legislation. Starting on April 1st, India imposed a tax of 30 percent on cryptocurrencies. This tax went into effect on April 1st.
According to a report that was leaked in May 2022, the newly elected president has the goal of passing the Digital Asset Basic Act (DABA) before the commencement of the next year. The NFTs and ICOs, and also the growth of infrastructure and support with CBDC research, would be the primary focus of the rules.