South Korea’s ruling People’s Power Party has proposed delaying the country’s tax on crypto trading profits.
On July 12, the party submitted the proposal, highlighting a negative sentiment towards crypto assets. The proposal stated that rapidly imposing taxes on virtual assets is “not advisable at this time.”
The party argued that crypto assets have higher risks compared to stocks, and imposing income tax could drive investors away from the market.
Originally, the tax on cryptocurrency gains was set to begin on Jan. 1, 2025. However, if the proposal is approved, the implementation will be postponed until Jan. 1, 2028.
As part of its campaign before South Korea’s general elections in April, the People’s Power Party promised to delay the crypto gains tax by two years.
On Feb. 19, the party emphasized the need to establish a comprehensive crypto framework before diving into taxation.
They stressed that crypto should only be taxed once a solid framework is in place.
A party representative pointed out that, unlike the stock exchange, there are no mandated entities to oversee crypto transactions.
Therefore, the party believes that spending two years to develop such a system is necessary.
The Korea Economic Daily reported that the plan to tax crypto gains was initially set to be implemented in 2021.
However, due to backlash from crypto industry leaders and stakeholders, the government delayed the tax implementation to 2023, and later to Jan. 1, 2025, to address investor concerns.
If the new proposal is accepted, the crypto gains tax will be delayed by nearly seven years from its original schedule.
Currently, South Korean investors must pay a 20% capital gains tax if their annual gains exceed 2.5 million won (approximately $1,800).
This threshold is much lower than that for stocks, where only gains exceeding 50 million won (about $36,000) are subject to taxation.
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