The People Power Party, a major political party in South Korea, has proposed to defer cryptocurrency taxation for up to two years as part of a general election pledge. The Korean government has already postponed establishing cryptocurrency taxation until 2025 when income generated from cryptocurrencies will be taxed at 22%.
Major Party in South Korea Proposes to Defer Cryptocurrency Taxation
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South Korea to Delay Cryptocurrency Taxation Until 2027
One of the largest political parties in South Korea is studying to delay the taxation of cryptocurrency income by two years until 2027. According to local media, the People Power Party, which controls the presidency of South Korea and is the second-largest party in the National Assembly, would be making this proposal part of an election pledge.
The measure would be taken due to the lack of a complete regulatory system for taxing virtual assets. The National Assembly passed the first part of a virtual asset protection act in June, that safeguards users and allows authorities to act directly against virtual asset business operators.
Nonetheless, the People Power Party believes a minimal regulatory framework has to be defined to tax virtual assets. The National Assembly aims to establish it by approving the second part of the mentioned act, which will focus on defining custody systems for virtual assets, convening legal listing requisites for these assets, and discussing the possibilities of launching a virtual asset stock exchange.
However, setting up all the legal apparatus for cryptocurrency taxation might take South Korean lawmakers even more time. An unidentified People Power Party leader stated:
It will be a general election pledge aimed at 2030. I think there is a need for at least a two-year delay until the amendment is passed and such a system is actually built.
The party is also examining changing the base amount in which digital assets will be taxed, as the current law has been criticized for negatively discriminating against these. While the law establishes that stock income has to be taxed starting at 50 million won ($37,300), digital assets have to pay 22%, starting at 2.5 million won ($1,860).
What do you think about the state of cryptocurrency taxation in South Korea? Tell us in the comments section below.
