South Korea Considers Delaying Crypto Taxation Until 2028 Amid Investor Concerns
In a recent report, it was revealed that the South Korean government is contemplating delaying the implementation of crypto gains taxation for a third time. This decision comes as investors in the country express growing concerns over the lack of clarity and “market confusion” surrounding the taxation of cryptocurrencies.
Initially, the government had proposed imposing a 20% tax on crypto gains by January 2022. However, this rule has been postponed twice already, with the most recent delay pushing the implementation date to January 2025. If a new bill proposed by the ruling party in South Korea is passed, the crypto tax date could be further extended to 2028, resulting in a six-year delay from the original plan.
The taxation of cryptocurrency profits was initially scheduled to commence in October 2021 after the National Assembly passed the related tax law during the Moon Jae-in administration. However, due to concerns about the burden on cryptocurrency investors and market confusion, the implementation date was first postponed to January 2023 and then again to January 2025 under the Yoon Seok-yeol administration.
The recent decline in crypto trading volume has also added to the apprehension among investors. The daily trading volume in March was approximately 20 trillion won, equivalent to $14.5 billion, but has since dropped to 2 trillion won. Industry experts fear that if the taxation of cryptocurrency profits begins early next year, daily trading numbers could plummet even further, leading to a mass exodus of investors and a decline in trading activity.
With nearly 6.5 million people investing in cryptocurrencies in South Korea by the end of 2023, the government’s decision to postpone the tax policy has sparked criticism from some quarters. While politicians are said to be mindful of the concerns of crypto investors, there are those who believe that the tax policy is being unduly influenced by public opinion.
Some officials have refuted claims of a lack of system and system maintenance for proper crypto tax regulation, arguing that the government has had sufficient time to prepare for the implementation of the tax law. They contend that another delay could potentially nullify the law, as similar arguments could be used in the future to postpone it further.
The Ministry of Strategy and Finance has stated that no decision has been made regarding an additional postponement of virtual asset taxation, with an announcement expected by the end of the month. As the debate continues, the future of crypto taxation in South Korea remains uncertain, with investors anxiously awaiting a resolution to the ongoing concerns.