South Korea’s proposed 20% tax on digital assets and cryptocurrency has been delayed for another two years till 2025 and the tax levy on crypto assets will commence in 2023. The fiscal head Ko Kwang-Hyo of the Ministry of Economy and Finance, South Korea announced the news on 16 May. Earlier, a 20% tax on crypto-asset earnings was scheduled to take effect on January 1, 2023, in South Korea, but Ko’s statement pushes that date out to 2025.
💥BREAKING: South Korea 20% #Bitcoin tax delayed till 2025. 🙌
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) June 20, 2022
Crypto tax policy in South Korea
At the beginning of 2022, South Korea had proposed to levy a 20% tax on bitcoin, however, the idea was delayed until 2023 due to investor resistance. The imposition of a 20% tax on capital gains exceeding US$38,624.95 from stock trading, which was planned to commence in 2023, has been delayed until 2025.
President Yoon Suk-yeol previously indicated that the cryptocurrency tax should be delayed until sufficient market infrastructure is in place. Ko’s announcement is now incorporated into the economic strategy roadmap. According to the concept, the forthcoming “Digital Assets Basic Act” (DABA) will regulate cryptocurrency creation and listing.
Crypto issue from Presidential election in South Korea
The crypto-friendly policy was a major concern in South Korea. The support for crypto-friendly proposals was shown in the March 2022 presidential election. Both contenders in the election announced pro-crypto positions, which, in contrast to previous President Moon Jae-stance in’s on bitcoin exchanges, have won favour among the younger, more crypto-enthusiastic people.
After the election result, South Korea’s new President Yoon Suk-yeol indicated in early May that he would try to postpone taxation on crypto asset earnings at least until the Digital Asset Basic Act (DABA) is adopted. In this regard, the South Korean National Assembly Research Service (NARS) issued a report in mid-May highlighting that a 20% tax on cryptocurrency earnings planned for 2023 must maintain a 2.5 million won threshold, in contrast to incoming President Yoon Suk yeol’s proposal to raise the maximum to 50 million won.
South Korea’s crypto tax plans were supposed to go live in 2022, but it was delayed for one year to 2023 in December. Yoon insured that the crypto tax bill would not go into force until acceptable consumer protection laws are in place, which may be around 2024. However, some recent reports in South Korea suggested that the bitcoin tax implementation date of January 1, 2023, not be pushed back to 2025.