- South Koreaโs ruling party has shown a willingness to postpone crypto tax.
- The implementation of the controversial crypto tax has already been pushed twice.
- Several factors could influence the third postponement.
The South Korean government and the right-wing political party are considering postponing the implementation of crypto gains tax for the third time.
Scheduled to be implemented in October 2021, the tax law was postponed once to January 2023 before the ruling party sought a second deferment for another two years as a โgeneral election pledge” to South Korea’s blockchain and crypto industry. At the time, the tentative implementation was scheduled for January 2025.
The Proposal for Third Postponement
According to a local media report on July 15, South Koreaโs People Power Party is mulling delaying the taxation of crypto gains from January next year to January 2028.
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The report noted that talks about the third postponement gained momentum after former Democratic Party of Korea leader Lee Jae-myung implied on July 10 that the country needed to โthink more about the timing of the implementation.โ
Other factors adding to the deferral momentum of South Korea’s crypto tax implementation include criticisms that full-scale taxation of digital asset income is practically impossible due to a lack of system and institutional support.
โSecondary legislation is needed to classify cryptocurrencies and specify the types of business within the industry in detail so that taxes can be levied without difficulty,โ the report quoted a government agency official. โThe institutional arrangements are not yet sufficient.โ
While the report claimed that the postponement seemed a โdone deal,โ it cautioned that the ruling party has yet to finalize its position on the matter. The Democratic Party is also expected to clarify whether it agrees to the postponement after the government announces its tax law revision bill later this month.
Meanwhile, South Korea is set to implement the Virtual Asset User Protection Act on July 19.
Stay updated on South Koreaโs guidelines for โjudging NFT virtual assetsโ:
South Korea Sets โGuidelines for Judging NFT Virtual Assetsโ
Read about OKXโs regulatory woes in South Korea:
OKX Caught in South Korean Crypto Crackdown: Probe Underway?
