South Korea’s ruling party proposes delaying crypto tax to 2028

South Korea’s ruling party, the People’s Power Party, officially proposed delaying the implementation of the country’s tax on crypto trading profits.

On July 12, the party submitted the proposal and noted that current sentiment toward crypto assets was deteriorating. The description stated that rapidly imposing taxes on virtual assets is “not advisable at this time.”

Furthermore, the proposal argued that with crypto having higher risks than stocks, investors are expected to leave the market if income tax is also imposed.

The taxation on cryptocurrency gains was originally set to take effect on Jan. 1, 2025. However, if the proposal is approved, the implementation tax will be postponed until Jan. 1, 2028.

Making good on election promises

As part of its campaign leading up to South Korea’s general elections in April, the People’s Power Party promised to delay the implementation of crypto gains tax in the country by two years.

On Feb. 19, the party argued that before diving into taxation, the country must create a general crypto framework. The party underscored that taxing crypto should only happen once the base framework is fully established.

In addition, a representative highlighted that, unlike the stock exchange, no entities are mandated to oversee transactions in crypto assets. The party believes that spending two years developing this type of system is necessary.

A seven-year delay in crypto tax implementation

Local media outlet The Korea Economic Daily highlighted that the plan to tax crypto gains in South Korea was first scheduled to be implemented in 2021.

However, because of backlash from crypto industry leaders and stakeholders, the government decided to push back the implementation of the crypto gains tax to 2023. It was again postponed to Jan. 1, 2025, citing concerns over investor interests.

If the ruling party’s new proposal passes, the implementation of crypto gains tax in the country will be delayed by almost seven years from its originally scheduled start.

In South Korea, investors must pay a 20% capital gains tax if their annual gains exceed 2.5 million won (approximately $1,800). This threshold is significantly lower than that for stocks, where only gains exceeding 50 million won (about $36,000) are subject to taxation.

Source: https://cointelegraph.com/news/south-korea-crypto-tax-delay-2028