South Korean regulators have agreed to postpone the implementation of a 20% crypto tax for two years, pushing back the bill’s intended start date from 2025 to 2027.

Postponement of Crypto Tax

The decision comes after the Democratic Party (DP) initially opposed the People’s Power Party’s plans to postpone the launch, insisting that the 20% tax on crypto traders must be implemented in January 2025. The DP had also proposed raising the annual tax threshold from 2.5 million won ($1,781) to 50 million won ($35,633), but the government rejected the proposal.

According to Democratic Party floor leader Park Chan-dae, the government needs “more institutional preparation” before regulators can systematically begin to tax crypto traders. “After in-depth discussions on the postponement of taxation on virtual assets, I thought that now is the time for additional institutional overhaul,” said Park.

Upcoming Vote on Crypto Tax Proposal

The National Assembly will vote on December 2, 2024, to decide the fate of South Korea’s crypto tax proposal. Both parties have agreed to postpone the tax, but there is still room for negotiations regarding the 13 bills proposed by the government, including the crypto tax bill.

“If the government does not take any action, an even greater reduction is possible with the revised plan [which modifies the current reduction plan].”

said Park, indicating that the 20% tax on crypto traders earning a profit minimum of 2.5 million won is still subject to change.

Impact on Crypto Exchanges

Several major crypto exchanges had argued against the 2.5 million won threshold, saying that a 20% tax on the basic deduction would make trading volumes plummet.

The law would implement a 20% tax with an extra 2% local tax towards profits exceeding 2.5 million won or around $1,781. This marks the third time the South Korean government has decided to postpone the virtual asset tax bill, which was first introduced in December 2020.

For more news on cryptocurrency and finance, visit Global Crypto News.

Post Views: 1