South Korea’s crypto tax was supposed to go into effect in the 2022 fiscal year, but it was postponed until 2023 in December due to investor criticism.
South Korea’s planned crypto tax on digital assets has been postponed for another two years, according to tax policy chief Ko Kwang-hyo of the Ministry of Economy and Finance.
President Yoon Suk-new yeol’s economic strategy roadmap included Ko’s announcement, who earlier stated that the crypto tax should be implemented until appropriate market infrastructure is in place.
Yoon Suk-yeol is demonstrating his crypto acumen by announcing in May of this year that there would be no tax on crypto investment earnings until consumer protections are established through legislation. Yoon Suk-yeol stated that he would advocate for deferring taxation on crypto investment gains at least until the Digital Asset Basic Act (DABA) is passed.
The newly elected presidential transition team has been looking at ways to postpone the tax since March when Yoon won the election on the basis that there was insufficient law in place to warrant levying taxes on digital assets.
The Financial Services Commission (FSC) established DABA this year, and it involves a variety of consumer protection rules. The act covers token issuances, nonfungible tokens (NFT), centralized exchange (CEX) listings, international finance in relation to cryptocurrency, and a response to US President Joe Biden’s executive order on cryptocurrency.
The FSC intends to introduce a crypto-insurance scheme through DABA as a backup against hacking, system faults, and unlawful transactions.
The contentious crypto tax legislation, which has been postponed again again, would impose a 20% tax on crypto investment gains exceeding $2,100 per year. The implementation of a 20% tax on capital gains exceeding 50 million Korean won (US$38,624.95) from stock trading, which was scheduled to begin in 2023, has also been postponed until 2025.