It seems that the South Korean government cannot make its minds up about taxation for crypto gains.
On July 21, The South Korean government informed the public that 20% crypto gains taxation is postponed to 2025.
This is not the first time it has happened. Initially, the tax was introduced back in 2021 and had to start operating from January 1, 2022. However, at that time the government postponed this law to 2023. Now, less than a year before the tax was due to take effect, it was delayed for another two years.
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Overall, the 20% taxes have been a topic of many debates, since their introduction in 2021. The tax will be applied to crypto gains that through the period of one year exceed 2.5 million won, which is $1,900.
Investors in South Korea have been debating the after-effects of such taxation. It has been assumed that the biggest damage will be done to small investors.
The Korean government based its decision to postpone the implementation of the tax on the rocky crypto market and the need to provide correct security measures for crypto investors.
Crypto taxes have been a topic included in public life for quite some time. South Korean president, Yoon Suk-yeol has used this issue as a part of his presidential campaign. During the campaign, the President promised to increase the threshold for crypto gains from almost $2,000 to $40,000. However, it didn’t happen.
Kim Young-jin, the chairman of the Tax Subcommittee, claimed that the government should start with overall crypto regulations, before implementing taxes.
It can be assumed that his words have been heard, as the government is planning the “Digital Asset Basic Act”, which will provide a regulatory framework for the digital asset industry in the country. Among other things, the act will overview ICOs and the listing of cryptocurrencies.