According to reports, the South Korean government delayed the implementation of the 20% tax on crypto gains by two more years. Although the controversial 20% tax on crypto-gains was due to go into effect January 1, 2023 it has now been delayed to 2025.
On July 21, the government announced its new tax reform plans. They deferred the crypto tax policy until 2025 due to stagnant market conditions, and the need for investor protection measures. The original plans to impose an additional 20% tax on crypto gains exceeding 2.5million won ($1,900) over a 1-year period are unchanged.
Since its January 2021 announcement, the controversial 20% crypto tax was delayed for the second consecutive time. Although the tax was originally supposed to be implemented by January 2022 by lawmakers in the country, it was deferred to 2023 by them. Now it has been delayed for two years.
Related: South Korean Crypto Market Grows to $45.9B in 2021, Despite strict Regulations
Kim Young-jin is Chairman of the Tax Subcommittee. He is one of those lawmakers who has opposed crypto tax policy and has called for solid crypto regulation. Korea’s pro-crypto President has been elected. Korea hopes to regulate crypto markets first, and then apply tax rules.
As the cryptocurrency market has grown to new heights in recent years, crypto taxation has been at the forefront of the government’s priorities. Similar to South Korea’s proposal for a 20% tax, Thailand proposed a 15% tax on crypto gains. However, the government was met with strong opposition from retail traders and had to end the tax policy.
India introduced a 30% tax to crypto beginning April 1st. However, this tax has caused havoc for crypto exchanges in India. Within weeks, trading volumes plummeted by more than 90%.
According to a leaked report, the president was working on the Digital Asset Basic Act (DABA), according to May’s leak. These regulations will be focused on NFTs, ICOs, infrastructure expansion and supporting CBDC research.